Obamacare Repeal
Upon being sworn in on Tuesday, the Republican Congress will move quickly to repeal Obamacare.
Exactly how it will be done has yet to be determined. However, the dismantling of the law will
bring about a long battle of what to replace it with; PIA National will continue to promote the
critical role that independent agents play in the sale and servicing of health insurance.
The ACA created the medical loss ratio (MLR) requirement, which is designed to limit the
percentage of premium that a health insurance company can spend on administrative costs. The
MLR requirement was intended to ensure that consumers receive sufficient value for their healthcare
dollar; however, in the creation of the MLR requirement, agent and broker commissions were
improperly classified as administrative costs, limiting consumer access to the essential resources
of agents and brokers. To address this issue, in the last Congress, PIA National endorsed the Access
to Professional Health Insurance Advisors Act, which clarifies that producer compensation is not
part of the MLR calculation set forth in the ACA. PIA National will continue to work with the bill's
sponsor Billy Long (R-MO), to ensure that regardless of how Obamacare is replaced, agent and broker
compensation remains a priority.
The "Cadillac Tax" provision of the ACA would, starting in 2020, impose a 40 percent tax on
so-called "overly generous" health plans. The tax will apply to fully insured and self-funded
employer health plans on amounts that exceed estimated annual limits of $10,800 for individual
coverage and $29,100 for family coverage. In December 2015, Congress included a two-year delay
of the tax in the year-end omnibus appropriations bill, meaning the tax is scheduled to take
effect in 2020 instead of its original date of 2018. PIA National is pleased by this delay but
will continue to advocate for the full and permanent repeal of the tax in 2017.
Bottom Line for Agents PIA National will work to ensure that when a plan to replace the ACA comes
forward it includes recognition of the role and value of the independent insurance agent in
delivering health insurance to consumers, and also supports the employer based system of health
coverage.