What Life and Health Players Still Want Out of Congress

Now that President Donald Trump has signed H.R. 748 — the $2 trillion Coronavirus Aid Relief and Economic Security (CARES) Act aid package — into law, life and annuity community are talking about what else they’d like to see Congress do.

Many groups have put out statements praising Congress for passing the CARES Act and the president for signing it.

Kevin Mayeux, the chief executive officer of the National Association of Insurance and Financial Advisors (NAIFA), says the final version of the act already contains many of the items NAIFA has been seeking.

“Small business loans to cover short-term payroll and other expenses, which could be forgiven at a future date; payroll tax exemptions; and relief from retirement-account withdrawal requirements and early withdrawal penalties have been at the top of NAIFA’s advocacy efforts and will be crucial to many NAIFA members and their Main Street USA clients,” Mayeux says in his statement.

Resources

The H.R. 748 Congress.gov page is available here.
An article about passage of H.R. 748 is available here.

Marc Cadin, the chief executive officer of AALU/GAMA, says the CARES Act should give Americans critical help with overcoming COVID-19-related disruption.

“The resilience of this nation is being tested,” Cadin says. “We all have to do our part to ensure Americans have the necessary tools to restore their financial security, and we are here to help not only our members but every person in this profession and all the people they serve.”

For the insurance sector in general, the hottest major battle may be over a property and casualty insurance issue: Whether states or the federal government should force providers of business interruption insurance to cover COVID-19-related claims, even if the business interruption specifically excluded coverage for disruption related to infectious disease outbreaks.

Both the National Association of Insurance Commissioners and the National Council of Insurance Legislators (NCOIL) have objected to the idea of the government imposing a huge claim burden on insurers retroactively.

Tom Considine, NCOIL’s CEO, has suggested that, instead, Congress should set up a federal claims fund that would resemble the 9/11 Victims Compensation Fund.

Here are four policy ideas that could affect life, health and annuity professionals.

1. Tax Deductibility for Advisory Fees

The Financial Services Institute and many other groups have accepted the idea that the CARES Act includes a withdrawal penalty exemption provision that will make it easier for get cash out of their retirement accounts early.

FSI has suggested that Congress could compensate for some of the effects of that provision on retirement security by reinstating the tax deductibility of advisory fees.

“This would provide some financial relief to many Americans who are seeking professional financial advice due to the market turmoil,” FSI says.

2. Access to Health Coverage

Margaret Murray, the CEO of the Association for Community Affiliated Plans (ACAP), says HealthCare.gov should start a special enrollment period, to give uninsured people a new, no-hassle chance to get covered.

Most states with state-based exchanges have already added COVID-19-related special enrollment periods.

Murray says Congress could also expand the number of people with coverage by adding a “risk corridors” program, to buffer health insurers against spikes in claims, and by increasing federal Medicaid matching funds for states that didn’t expand their Medicaid programs.

3. Paid Leave

The bill signed into law before the CARES Act, the Families First Coronavirus Response Act, provides for up to 80 hours of paid leave for many workers affected by the COVID-19 pandemic.

Jamie Kalamarides, president of the group insurance unit at Prudential Financial Inc., says in a statement that the current economic downturn is affecting many workers who live paycheck to paycheck. “Paid family leave is a critical benefit for millions today through private insurance,” Kalamarides says. “Expanding access to private insurance paid leave is even more important in times of crisis.”

The Consumer Federal of America (CFA) says Congress ought to provide a comprehensive, national paid sick leave policy. All employees, and all independent contractors, should have access to paid sick leave, the CFA says.

For some employers, a sick leave mandate could be a burden.

For insurers with absence management, short-term disability insurance and family leave benefits programs, expanded leave requirements could be a business opportunity.

4. Provider Prices

The Families First Coronavirus Response Act requires self-insured employers to cover COVID-19 diagnostic services without imposing co-payments, deductibles or other cost-sharing on the patients.

The Pacific Business Group on Health (PBGH) says Congress should prevent provider profiteering, by imposing reasonable limits on COVID-19 testing, vaccine and preventive care services prices, and by outlawing unreasonable increases in prices on all COVID-19-related products and services.

“While there are undoubtedly large increases in utilization due to COVID-19, we cannot let that cost burden be compounded by bad actors who might use the current crisis to raise prices unreasonably,” PBGH says.