From the March 2011 issue of Benefits Selling Magazine •Subscribe!

The Nashville show that almost never was

Last May, we watched with trepidation as floodwater from the swollen Cumberland River submerged the Gaylord Opryland. It would take days for the water to recede in Nashville, and months -- even years -- for Music City to recover.

We needed to think fast. Preparations for Benefits Selling's 2011 Expo were under way, and even though the show was still a year away, our most important detail - the location - had been compromised.
Still the hotel's determination to quickly rebuild kept us in confidence. With rooms at Opryland comprising 10 percent of the total hotel rooms in Nashville, the process of renovation would have to move swiftly. A re-open date in November 2010, 195 days after the epic flood, was projected and fulfilled.

In all, the reconstruction of Gaylord Entertainment's Nashville properties, including the resort and convention center and Grand Ole Opry House, totaled somewhere around $225 million. Roughly 75 percent of hotel staff was hired back, and 400 jobs opened up. A huge portion of the hotel - including parts that didn't sustain damage - was redesigned; the lobby got a face lift, restaurants were replaced, and an entire wing was updated.

So here we are. Ready for April, and thrilled to see Nashville is putting itself back together. And, though we fret to use the clich?, the show really must go on.

Happy Birthday, Health Reform
Like any major intrusive legislation, the health care reform bill's process of evolution is a slow and gradual one. In this one-on-one interview with Benefits Selling, Roger Abramson, General Counsel for AmeriFlex, gives us some insight on what to expect, and how to react tactfully.

Benefits Selling: What has been the most significant changes of health reform that have presented either a burden, opportunity or both for consumers and employer-sponsored health coverage?

Roger Abramson: The whole thing is a burden for employers by simple virtue of the massive footprint it makes in the private sector. As everyone knows, it's extremely complex, so just wading through the statutory language in the first place is a burden. But - of course - figuring out the statutory language is just half the battle.

The next - and still ongoing - step is what the regulatory agencies interpret the statutory language to mean. And they're still working on that. And it doesn't end there: We've already seen these agencies make a stand and then back down through the "waiver" process on certain occasions. It's hard for employers to make long- or even medium-term decisions with this degree of legal and regulatory uncertainty. Ironically, the recent changeover in the House of Representatives makes this problem even worse - at least in the short-term - because even more changes may come.

Opportunities? Hard to say. I haven't seen any official numbers, but I suspect HCR has been a wonderful growth opportunity for employee benefits attorneys and HR folks with a health care bailiwick. I would suggest that the jury is still out on what it does for health care consumers. HCR proponents will, of course, say that health care consumers get a lot out of the deal, but as we all know there is no free lunch. Someone has to pay the piper, and, one way or the other, it will probably be consumers in the long run.

BS: What major changes can be expected from health reform and what might disappear?
RA: People need to understand that HCR is a sort of legislative time-release capsule: Different aspects of it are "activated" over a period of time, culminating in the so-called "Cadillac Tax" in 2018. Weirdly, the most common question I got after HCR was passed was about the Cadillac Tax.

My answer to all of these questions was simply not to worry about the Cadillac Tax for now - that it's so far down the road we don't know if there will even be a Cadillac Tax when the time comes, or, if there is, what the dollar thresholds will actually be, notwithstanding the "guesstimate" numbers in the legislation.

I told them to focus on the things that became effective with the passage of the legislation (such as the increase in the dependent age) and then the things that would become effective over the next couple of years (such as the prohibitions on annual and lifetime limits), because those were things most likely to stick in the long run. Having already been "set in stone," as it were.

So, having said all of that, here are my general rules for predicting the future of HCR:

  1. Anything that has already been activated will likely stay in place, with only minor tweaks and adjustments here and there.
  2. With regard to anything that has yet to activate, anything from minor tweaks and revisions to outright repeal is possible.
  3. The farther down the "activation schedule" an HCR provision is, the more likely that provision is to be repealed.
  4. Provisions that expand(ed) coverage or prohibit(ed) the restriction of coverage are the most likely to remain in place because they are politically popular.
  5. Provisions that impose taxes and/or other penalties (e.g. the "Cadillac Tax") are the most likely to be repealed or significantly curtailed because they are politically unpopular.

BS: What will be most important for brokers to communicate to their clients going forward?
RA: This will make me sound like the civics nerd that I am, and I'm sorry about that, but the biggest thing both brokers and employers need to do is learn about how things work in the federal government, start following what's going on, and--if need be--get involved.

I say this because I am amazed at the very low level of knowledge--or even interest--some folks in our industry have about the legislative and regulatory process. This is inexcusable. We are not selling lemonade on a street corner: The employee benefits world is a regulated sector, and it's getting even more so every passing day. We need to get smarter about the process and more proactive in it. Contact your congress people. Send a comment to the IRS about a proposed rule.

Get involved. It's one thing for policy wonks and talk show hosts to talk about how new rules and regulations hurt productivity in the private sector; it's so much more for government folks to hear it from actual people in the private sector. That makes a difference.

It Ain't Over Yet
The PPACA has had a significant impact on the limited medical industry - and the landscape continues to change as the government provides additional guidance on what is and what is not allowed between now and 2014. With so much uncertainty, let's begin reviewing where things stand in the limited medical (also known as mini-med) marketplace.

Benefits Selling: How has PPACA affected the limited medical industry?
Brian Robertson: The past 12 months has certainly been an interesting time to be involved with group health care. It's been almost a year since the PPACA was passed and there are as many questions today as there are answers about how the law works. Everyone - employees, employers, elected officials, insurance carriers, agents and brokers - is struggling to determine how this legislation will impact them.

The Department of Health and Human Services has provided some guidance how the PPACA applies to the limited medical industry. They've also provided hundreds of waivers for companies currently utilizing the expense-incurred style limited medical plans, which were outlawed by the PPACA regulations.

They have addressed annual limit waivers and the interpretation of limited medical minimum loss ratios, which bought another year of survival for many limited medical plans, but it's still pretty crazy out there in the limited medical world.

BS: What will happen to limited medical in 2011?
BR: That's an answer that will have to play out in time. HHS has a long way to go. More regulations could impact plans subject to PPACA. Rest assured there is much we do know - and numerous ways for us, the benefits community, to provide value to our customers. Why worry about uncertainty when there are better, less controversial options available today?

BS: What trends are you seeing among employers with a limited medical plan already in place?
BR: In 2010, we definitely saw a lot of employers waiting on word from the government about the waiver process. There was a ton of quoting activity as brokers sought potential homes for their customers, in case they didn't get a waiver. The next wave of waiver applications should be quite interesting.

BS: Can brokers sell new limited medical plans?
BR: Absolutely there are viable solutions available for brokers who want to put a limited medical in place and not worry about it for the next couple of years. Fixed indemnity style limited medical plans, such as the Framework Health Plan, do not meet the definition of a "group health plan" under PPACA. As a result, the Framework Health Plan's fixed indemnity limited medical product is exempt from the new rules affecting most health plans. These plans offer a viable option for new business - as well as continuing to serve the thousands of working Americans they already cover. No significant changes at renewal time are expected prior to 2014.

BS: You have a client on a coinsurance based limited medical plan that is subject to PPACA. What should you be doing for that client right now?
BR: Whether or not you received a waiver for any part of your plan for 2011, the product faces many uncertainties, especially with the laser-sharp focus of the government on these plans. A back-up plan should be in place, if not implemented.

BS: How is PPACA affecting rates?
BR: Many groups are facing rate increase because plans subject to PPACA cannot add new business and are facing uncertainty in managing costs associated with meeting the Act's requirements. If your plan is facing this kind of change, it is time to evaluate other options.

BS: How will PPACA affect agent commissions?
BR: Let's face it, the MLR wording is murky. If carriers have to cut expenses, guess what is most likely to get chopped first - agent commissions. If you wish to maintain your current revenue level, I'd start looking for a different kind of plan to market.

Interested in learning more? Join Framework Health Plan's Brian Robertson and several experienced limited medical brokers as they discuss how health care reform has changed their practice and what they're doing to not just survive but thrive. The panel discussion will offer best practices and guidance on which plans still work, selling limited medical today, overcoming objections, lessons learned/how to avoid getting burned, what to advise your clients and much more.

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