Health Care Reform Dominates Trade Group’s Lobbying Agenda

By | November 20, 2009

Until this year, health care was a minor blip on the radar of insurance agents’ policy efforts in D.C. But with a major reform bill imminent, key trade groups are devoting nearly all of their time to try and tweak the emerging health care reform package to make it as palatable as possible for agents, a senior lobbyist told a meeting of agents in Connecticut yesterday.

“We spend 95 percent of our time on this now,” said Joe Wall, a former staffer for Vice President Cheney and now a senior lobbyist for The Big “I”. Wall was in Connecticut yesterday to present an update on health care reform to members of the Independent Insurance Agents of Connecticut.

Wall said, efforts on P/C-related items or other agency management issues normally dominate the lobbying agenda, but with the potential impact that health care reform poses on insurance agents and their businesses, it will remain the group’s dominant policy issue for the foreseeable future.

It should: According to a recent study by The Big “I”, nearly 63 percent of insurance agencies sold health insurance, although health insurance sales represented less than 15 percent of agencies’ revenue streams.

The majority of those sales were to small businesses – about 60 percent of those sales were in the small group category, or between two to 50 persons.

Wall also said the efforts to steer health care reform has led to partnerships between lobbyists from The Big “I”, Council of Insurance Agents and Brokers, National Association of Health Underwriters and the Coverage that Works Coalition.

The 2,074-page health care bill includes a range of items that some say could be time bombs in waiting for some agencies – or new opportunities.

Wall said a key focus area for The Big “I” is on the role of agents and brokers in the purchasing process for health insurance. Earlier versions of the bill did not require an insurance license for anyone working to enroll people in a health insurance plan, be it government-run or otherwise. More recent iterations of the plan, particularly an amendment by Sen. Orrin Hatch (R-Utah), require an insurance license to enroll the uninsured through a so-called Navigator program, Wall said.

There is also the issue of commissions, which Wall said would be likely end up being set by the federal government – most likely the Department of Health and Human Services.

But the prevalence of health insurance sales in agencies across the country is only part of the reason for the focus on reform. Much of the bill, in particular its tax ramifications, are likely to have a tremendous impacts on owners of more profitable agencies, Wall said.

Of particular note: Various proposals of the health insurance reform making its way through Congress include significant taxes or penalties on small businesses as a way to fund the program. This includes a proposed 5.4 percent sur-tax on individuals making over $500,000, which would have large tax implications on many agencies that file with the IRS as S. Corporations, Wall said.

Topics Legislation Agencies Connecticut

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