Before PPACA, brokers were primarily sales consultants or partners, and legal and regulatory knowledge was important but secondary. The theme of conversations with clients was “what benefit plan best fits your business?” Post-PPACA, brokers still have a sales role, but they have a more limited “menu” that they can offer, said Roger Abramson in his breakout session, “Wise Counsel: Say This, Not That When Advising Clients on PPACA Compliance.” Legal and regulatory knowledge are now just as important, he noted, and the theme is. “How can you most appropriately comply with PPACA?”
Abramson reminded the audience that it’s important to know what you know and what you don’t know. Clients are expecting the same level of what he calls “I-can-answer-that service that they’ve always had,” but the reality is that unless there is a part of PPACA, a rule or a regulation addressing a specific situation, “you don’t know the law,” he emphasized. “You know the PPACA rules, but you don’t know the facts; you need to know to apply the rules. What if the client has the wrong facts? Or doesn’t give you all the facts?”
It’s the same problem for employee benefit lawyers, Abramson admitted. “There’s a lot nobody knows.”
The introduction of employer-subsidized individual insurance coverage generated a lot of lively discussion and controversy among the session’s attendees. Abramson noted that IRS has released several notices saying the same thing: Employers may no longer reimburse employees for individual health insurance policies on a pre-tax basis: “However, you may be able to on an after-tax basis, but it depends on the facts.”
A major problem for brokers is that health insurance—and by extension, employee benefits—is now a fluid landscape; with limited foreseeability. It’s difficult to advise clients when no one knows what the rules will be a year from now.
Abramson pointed out a safe zone for brokers: Insured plans from the major carriers comply with PPACA. The issue for brokers is compatibility—that is, how does this plan fit with employer’s needs?
Providing a small measure of comfort, Abramson noted that the non-discrimination rules for insured plans are still not in place. The law says the old way isn’t valid; however, the IRS isn’t enforcing this until rules are issued—which could change tomorrow.
The employer “pay-or-play” rules are also fact-specific, Abramson noted: “You’re at the mercy of what the employer tells you. They often forget about part-time employees, seasonable employees or interns.”
Sometimes the relevant facts are unknown to the employers, too, Abramson observed. His advice to brokers is to preface every conversation and note in every document: “Based on the information you gave me, this is the answer…” It provides brokers with protection in case the employer comes back to challenge the information provided.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
