Your Westfield

Agent’s Association

Welcomes you!- Second in a series of four webinars –

This session will be recorded

with

John Prible,VP Federal Government Affairs

Independent Insurance Agents & Brokers of America

Health Care Reform

A Timeline & Perspective

The Role of Independent Insurance Agents and Brokers• 62% of agencies sell health insurance.• Breakdown of sales:

o 15% Large Group Policies (51+ employees)o 25% Individual Policieso 60% Small Group Policies (2-50 employees)

Source: IIABA Member Survey; March 2009

A Timeline of the Health Care Provisions that could affect you.

Implementation

As you can see from the summary, implementation of the new bill will generally phase in between 2010 and 2014.

HHS is already beginning on working on regulations for implementation.

Many of the provisions in the law, however, are left to be implemented by individual states (especially the creation of regulation of the new Exchanges).

We expect a great deal of confusion by customers, industry, and even state officials as implementation unfolds.

2010/2011 2014No lifetime benefit limits and restricted

annual limits. Exchanges created.

Required to carry dependents up to the age of 26. Guaranteed Issue.

New MLR restrictions. Individual Mandate.

CLASS Act. Employer “Mandate”.

Small business premium tax credit New rating bands.

Some Specific Provisions and a Timeline

2010

2010 Cont’d

2010 Cont’d

2011

2011 Cont’d

2012

2013

2014

2014 Cont’d

2014 Cont’d

2016

2017

2018

Perspective on Health Insurance in the Future

Impact on Individuals and Businesses

A new health care world.

A new way of doing business.

Small business premium tax credit• Applies to employers with 1-25 employees

• Employer must pay at least 50% of health care premium

• Credit based on number of employees and

average annual wages per FTE

• Employer and family members not included in eligibility

• Premium credit reduces tax deduction of premiums

2014 – A New Marketplace & New Competition

2019 – 32 Million Newly InsuredWhere do they go?

Current Status– Private Health Insurance Marketplace

*Source - Congressional Budget Office

Projected 2019 Private Health Insurance Marketplace

*Source - Congressional Budget Office

Opportunity

Implications on the bottom line for the Industry

Medical Loss Ratio (MLR)

Squeeze

New Insurance

Plan Requirements

Thin Margins for InsuranceIndustry

New Fees on Insurance

Companies ($14.3 billion

by 2018)

Impact on Employers Employers with 50-plus full-time (30 hours per week or more) employees are subject to the following:

If an employer does not offer health insurance and has at least one employee who qualifies for a tax credit, the employer is subject to an annual fine of $2000 for each full-time employee.

If an employer does offer health insurance coverage but has an employee who goes to an exchange (because the employee’s share of the premium exceeds 9.8% of their annual income) or if the employer fails to offer the minimum health insurance coverage, the employer is subject to an annual fine of $3,000 per employee going to an exchange (maximum penalty is $2,000 for each full-time employee in your total workforce).

If an employer does offer health insurance coverage, the employer is required to offer a voucher to employees with incomes less than 400% FPL and whose share of the premium exceeds 8% but is less than 9.8 of their annual income who decide to enroll on a plan in an exchange. The voucher is equal to what the employer would have paid for the employee’s health insurance coverage. (CBO: 1-2 million employees would jump from employer coverage to the exchange.)

Employers may not impose a waiting period before their employees can enroll in coverage of longer than 90 days.

Employers with 200-plus full-time employees must automatically enroll their employees into health insurance plans.

Confusion for Employers – Where do they turn for help?