PURPOSE OF LEGISLATIVE SPOTLIGHT
LEGISLATIVE SPOTLIGHT is produced by NAIFA and is supplied to the Society of Financial Service Professionals as a collaborative effort that seeks to raise federal and state regulatory awareness for financial service professionals. The essential purpose is to facilitate understanding and a more fruitful dialogue with constituents and/or clients with regard to these important issues.

Speaking as one, we can and will make a difference.

Comments on Legislative Spotlight: Contact Ron Panneton with comments or suggestions concerning this newsletter.

President Signs New NFIP, Pension Changes into Law

On July 6 President Obama signed into law a five-year reformed National Flood Insurance Program (NFIP), pension law changes, a 27-month federal highway/surface transportation program, and a one-year extension of the 3.4 percent rate on subsidized Stafford student loans. The House approved the bill H.R. 4348 by a 373-52 vote. The Senate vote was 74-19.

Flood Insurance:
The reformed NFIP program will be in effect  through September 30, 2017. The new NFIP program provides for greater reimbursement and reinsurance opportunities for private insurers, and calls for a closer study of the role private insurers play in the NFIP.

The new program does not include the problematic “depopulation” language from the House version of NFIP reform that was of such concern to many State Farm agents.

Pension Law Changes:
The pension changes include defined benefit (DB) pension plan funding relief, Pension Benefit Guaranty Corporation (PBGC) premium increases and governance reforms, and authority to use excess DB funding to pay for post-retirement health and group term life insurance benefits.

Why It Matters: When State Farm pulled out of the Write Your Own (OWN) program, it transferred its  800,000 policies to NFIP Direct. With the depopulation language removed State Farm agents will still be able to sell and service those policies with NFIP Direct.

The pension changes will help insure that post-retirement health and group term life insurance benefits will be paid when necessary.

To Learn More: Contact Diane Boyle at dboyle@naifa.org.

Supreme Court Upholds Health Care Reform

On June 28, the Supreme Court held 5-4 that the health care reform law is, in fact, constitutional (with the exception of certain Medicaid components) under Congress’ power to impose taxes. Chief Justice Roberts—who authored the decision—joined with Justices Ginsburg, Breyer, Kagan, and Sotomayor in their votes to uphold the law. Dissenting votes came from Justices Kennedy, Scalia, Thomas and Alito.

With PPACA being upheld, provisions such as the individual mandate, employer responsibilities, and state-based health care Exchanges will proceed as planned.

Medicaid Expansion:
The court did limit the law’s Medicaid expansion provision. It ruled that the government could not withhold existing Medicaid funds if states do not agree to the Medicaid eligibility rules, but the government can withhold any additional Medicaid funds.

Congressional Efforts to Overturn Law:
On July 11, the House voted 244-185 again to repeal the 2010 health care reform law. As expected, just a handful of Democrats supported the repeal bill. Five Democrats sided with Republicans in the final vote. The Democratic led Senate will very likely ignore this-just as it did last year’s version.

NAIFA continues to believe that Congressional modification is needed and will ask the following of Congress:

• Remove agent commissions from the medical loss ratio (MLR)
• Repeal the Class Act
• Raise or remove the contribution cap for flexible spending arrangements (FSAs)
• Reverse the 3.8 percent-tax on unearned income (including annuities)
• Enhance HAS and FSA use
• Build on the employer-based system
• Reduce consumer costs

Why It Matters: The American consumer needs affordable health care and reasonably compensated health agents to help them get the right coverage and service the policy when needed.

To Learn More: Contact Diane Boyle at dboyle@naifa.org.

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