Is Group Health DOA Because of This Bill?

[b8fshn]

I don't post on the forum but really enjoy the input by others. I was having breakfast this morning with a group customer (54 employees) who informed me if the bill passes he has been advised by his consultant to drop group health within the next 2 years and pay employees the group health premium difference. They feel it will be cheaper than providing coverage. Has anyone heard anything like this from anyone. I only have a couple groups, so it won't impact me too much but I would like to be able to answer this question in the future. any input appreciated. Also on the surface it could be a boom for individual sales, but what is the opinion of the forum on long term outlook for health sales. I have only been in the Health market a year and wondering if I need to look more towards senior market sales and financial services. Thanks your comments are always appreciated.

 

[Central Coast Agent]

I think the lack of responses is a good indicator that nobody really knows. I can tell you that at a 2009 California Association of Health Underwriters sales meeting I attended, there was a round table discussion that included executives from the major carriers in California. During the discussion, this very topic came up. The response from one of the executives was that agent compensation in the health markets will have to change...and it would probably be a good idea to diversify in light of the healthcare proposals that were on the table at that time.

Flash forward to today and that is probably good advice, but even still, nobody really knows how things will effect group or individual markets. With many provisions not even taking effect till 2013 or 2014, a lot can happen.

So, while its hard not to get distracted by the constant news, my advice is this:

Close your ears and just sell. I'm a new agent too, a year this month, and last month was my best month ($62,000 in annualized premium, mixture of small group and individual). Things are picking up for me and I plan on having a great 2010. I'm hoping...hoping...that my 2011 and 2012 will be even better.

I'll deal with health care reform in 2013 or 2014 when I have to. I went out and got my P&C license just in case and I'm making good connections with local P&C agents, sending them leads, etc. I figure if I need a job or some P&C training in the future, I'll have some numbers to call of people who know me as an excellent salesperson...if it gets to that point...it may not.

My teenage daughter is always worrying about this and that, and I tell her to deal with problems when they present themselves as problems, and not get caught up worrying about "what if's". You will do yourself a huge favor if you follow this advice with your practice. Deal with it when it comes, but have a plan B in the background.

I use to work in the legal field when I was in college. When Workers Comp attorneys and Bankruptcy attorneys went through legislative changes in the 90's...did they give up and stop being attorneys? No, they were still attorneys...they retooled and went out and practiced another type of law like family law or business litigation.

So it is with licensed insurance professionals. If health care reform destroys your health care practice, switch gears and practice another type of insurance...don't get caught up so much in the specialization...just like a medical professional or a legal professional, you are an insurance professional. When the market changes, you change with the market.

But, whatever you do, don't freeze up and do nothing or bail on the profession of your choice because of new legislation...all industries are regulated so now is the time to learn to roll with the punches.

I hope this helps.

C.

 

[somarco]

Originally I thought the bill would have little impact on group health plans. I'm inclined to change my mind now.

Section 1003 makes the fine for failing to provide group health insurance $2000 per employee per year. That is far less than the cost of health insurance.

Similarly, section 1002 lowers the fine for individuals who refuse to buy insurance to $325 per year.

OTOH, the IRS will be given expanded tracking and enforcement responsibilities to find the employers and individuals who are non-compliant.

When this passes, expect challenges in the courts. Also look for a bloodbath in November elections.

Some 20 years ago Congress passed a tax increase on seniors. The revolt was so vocal the bill was repealed the following year. I can't recall all the details but perhaps Winter or some of our political historians can fill in the gaps.

 

[bill3173]

Originally I thought the bill would have little impact on group health plans. I'm inclined to change my mind now.

Section 1003 makes the fine for failing to provide group health insurance $2000 per employee per year. That is far less than the cost of health insurance.

Similarly, section 1002 lowers the fine for individuals who refuse to buy insurance to $325 per year.

OTOH, the IRS will be given expanded tracking and enforcement responsibilities to find the employers and individuals who are non-compliant.

When this passes, expect challenges in the courts. Also look for a bloodbath in November elections.

Some 20 years ago Congress passed a tax increase on seniors. The revolt was so vocal the bill was repealed the following year. I can't recall all the details but perhaps Winter or some of our political historians can fill in the gaps.

The group benefits consultant that I use was a little smug about the whole thing a year ago, telling me that I would probably lose my individual business, but group would be fine, and to step up production.

Last week when we talked, for the first time he was cussing his head off about this bill. Coming from a guy that rarely shows any emotion this was a little worrisome.

 

[lakeloveroktx]

When did everyone forget that employers are providing a benefit for employees to be competitive? No one is forcing them to buy insurance now. If one employer does not provide insurance then he will lose his top talent to an employer that does.

 

[somarco]

Some employers offer health insurance by class. They really don't care about the rummy's if it is a low skilled job. Offer them a limited benefit plan and management get's the real deal.

I have clients at CDC that are contract workers covered by a limited benefit plan.

 

[moonlightandmargaritas]

They really don't care about the rummy's if it is a low skilled job.

Are these the same folks that are sometimes referred to by some as "lackeys"?

 

[somarco]

Same class, only a bit lower in the gene pool.

 

[moonlightandmargaritas]

Same class, only a bit lower in the gene pool.

Hahaha. Kinda like imbeciles vs. morons?

 

[b8fshn]

Thanks for all your input and the encouragement Central Coast Agent. I am not giving up on insurance, I am just trying to beat the rush if health takes a hit. I spoke with several agents that agree that comp will be the cut first to make up for restrictions. I also read 1003 and it refers to employers with >50 employees. I am from a small town and most business owners employ less than 20. I didn't see any penalty for them. At the Chamber today I was visited by another owner (15 employees) and he was concerned that if his rates went any higher and the COBRA law not changed, the only way he can afford to stay open is to drop all benefits, lay off 2-3 employees and wanted a quote for his family. I wonder if the idiots in Washington realize or care how much these threats and lack of action are making small business crazy.