Is Your Agency Taking Advantage of the Opportunities Created by the ACA?

In last week’s post, I discussed the reporting requirements imposed on employers by the Affordable Care Act (“ACA”), commonly known as Obamacare, which requirements are effective for 2015.  Informing or reminding an agency’s commercial lines customers who may be subject to those reporting requirements is one way that an agency can use Obamacare to its advantage, regardless of how its owners may feel about it.  Assisting such customers in determining how they will comply with those requirements and suggesting possible solutions for the handling the complexity created by them should go a long way in showing those customers how dedicated an agency is to providing added value services and becoming a trusted advisor for its customers.  Along these lines, the IRS has just created a webpage devoted to the 2015 filing requirements. It has links to the final versions of the forms that will be used to satisfy those requirements, as well as other pertinent information.

For those agencies that offer health insurance coverage, a recent study by AFLAC found that there is a growing market for voluntary coverages that plug the gaps created by the health insurance policies that are available to individuals on the federal and state exchanges created under the ACA.  Sixty-four percent of the employees surveyed recognized the need for other coverages beyond what they could get from their employer or the exchanges.  In addition to selling voluntary coverages, almost 60% of the brokers surveyed were working as navigators and/or producers for insurance coverages provided through the exchanges and those brokers reported on average that 35% of their total revenues were directly related to their exchange activities.

While initially the environment for insurance agents and brokers who wanted to engage in exchange related activities was not particularly welcoming, that is beginning to change as the Center for Consumer Information and Insurance Oversight (“CCIIO”) has recently announced that it will create a hotline dedicated to answering “general questions” related to the federal exchanges.  No date has been set for when the hotline will be created, but as B. Ronnell Nolan, president and CEO of the lobbying group Health Agents for America, recently stated, it is a step in the right direction towards leveling the playing field for insurance agents and brokers (click here for a recent article on the hotline and related topics).

Another step in the right direction occurred when the Centers for Medicare and Medicaid Services, which oversees the CCIIO, announced in August that it would partner with three organizations, the National Association of Health Underwriters, America’s Health Insurance Plans, and Gorman Health, to offer agent and broker training for the federal exchanges.  This will allow agents who choose to undergo the training required to participate directly in those exchanges to receive continuing education credit for doing so.  While agents must still begin the process on the CMS website to verify their identity, they will then have the option to receive the required training through the government website or go to one of the three outside vendors for the training.  There will be a cost associated with the training offered by the outside vendors, but that cost will be comparable to what an agent would have to pay for other continuing education courses. (Click here for a recent article on this subject.)  For those who would prefer not to have to pay for the training, there is one training session left this month, on September 25 at 1 p.m. EDT.  (Click here for registration information.)



What’s New With The ACA?

It’s been over nine months since my last post about the Affordable Care Act, commonly known as Obamacare.  In that post, I discussed the exemptions from the “pay or play” penalty that would be effective for the 2015 calendar and plan years.  Unfortunately for employers, the exemptions from that penalty do not apply to the reporting requirements imposed by Sections 6055 and 6056 of the Internal Revenue Code.  Those requirements relate to the type of health insurance coverage provided by employers to their employees during 2015 and later years.

All employers, regardless of size, who offer any type of group health insurance are required to file the Section 6055 report for each employee, a copy of which report on Form 1095-B is to be given to each employee.  Even those employers with less than 50 full-time equivalent employees are required to prepare and file this report.  Fortunately, for those employers who have fully insured plans, the provider of those plans is responsible for preparing the report, distributing it to the employees, and filing it with the IRS.  Those employers who self-insure their employees’ health insurance coverage will have to prepare, distribute, and file the required reports themselves.

Only those employers with 50 or more full-time equivalent employees have to file the report required by Section 6056.  The employer is responsible for preparing this report, filing it with the IRS, and giving it to each full-time employee on Form 1095-C by January 31, 2016.  This report must be prepared, filed, and delivered, even if the employer does not offer health insurance coverage to its employees and would be exempt from the penalty for not doing so because it had 30 or fewer true full-time employees (i.e., those who regularly work 30 or more hours a week).  In addition, the employer must prepare and file with the IRS a transmittal form, Form 1094-C, for the Form 1095-Cs, which requires information about the insurance coverage provided and the number of employees on a monthly basis.  For a more detailed explanation of the reporting requirements imposed by Sections 6055 and 6056 and what information must be provided click here.  Even though the deadline for completing the required employee forms is only a little over four months away, the IRS has not yet released final versions of those forms for 2015.  Click here for draft copies of those forms.

Earlier this month, there was a post on the Employee Benefit Adviser site that cautioned against seven myths about the above reports.  For those employers who are planning on doing everything themselves, the author noted that the instructions for Form 1094-C and 1095-C are 14 pages long and written in the usual dense prose of the IRS.  In addition, the IRS has released another 14 pages of clarifying questions and answers.  For those who think they can wait a while longer before deciding what they will do, the author notes that information must be reported to the IRS on a monthly basis and many of the vendors who are offering their services in this area are increasing their fees the closer the deadline gets.

Although the IRS has indicated for this first year of reporting it will give some relief for improperly completed or filed reports under Sections 6055 and 6056,  it has stated there will be no relief from the fines for failing to meet the requirements of those Sections for employers that cannot show a good faith effort to comply to the extent possible or who fail to timely file with the IRS or give a required report to their employees.  Those fines are $250 for each form that is not filed or is incorrectly completed and filed with the IRS and for each form that was not properly delivered to an employee.

What Are You Doing to Ensure the Success of Your Agency’s Producers?

Last week I wrote about the need for an agency to have a perpetuation plan and what goes into creating such a plan.  For those agency owners who want to pass on their agency to family members or other employees, it is important to have both a healthy agency operation and able buyers.  These two ingredients go together in that a healthy agency operation means its producers are growing their books of business and by doing so they become more financially able to buyout the agency owner.

A recent article in the IA newsletter discussed 11 reasons why producers fail to achieve success in growing their books of business.  By doing what they can to help their producers avoid these reasons, an agency owner can go a long way toward ensuring their agency’s healthy operation.  The reasons involve failures on the part of the producer (not asking for help, not learning the people side of the business, all talk, no action), as well as the agency management (no training program, not connecting the producer with other staff that could help, not using readily available referral sources).  Perhaps the most interesting point made in this article was that studies have suggested that prospects are not generally ready to buy from a salesperson until at least five prior contacts have been made and maybe as many as 10 or 12.  So it is important for the producer to be persistent in their dealings with prospective customers.

Another recent IA newsletter article discussed eight tips for successful sales appointments that would be a helpful guide for all producers.  The tips focus on the importance of the producer being comfortable with themselves and putting themselves in the shoes of the prospect to arrive at an approach that would be of interest to the prospect and would make things as easy as possible for the prospect to decide to do business with the producer.  Perhaps the most important tip is the first one.  The producer should be clear about the purpose of each contact they make with a prospect.  Until the producer decides what they want to achieve with each contact, it will be difficult to decide on the proper approach.   What they want to achieve will depend on where in the sales process the producer is and who they are dealing with.

This IA newsletter article also suggests a couple of approaches to getting appointments that involve using the names of existing customers.  That is one of the approaches suggested in a recent article in the Property Casualty 360 newsletter that discusses eight great opening lines for producers.  The others range from being honest about the possibility that what the producer may have to say may not be of interest to the prospect to suggesting the use of online presentations.

Finally, for those producers who just can’t seem to get going, another recent article in the Property Casualty 360 newsletter suggests eight steps that can be taken to overcome the tendency to procrastinate.  These steps are probably familiar to anyone who has dealt with this problem, but they offer a handy guide for what to do and why to do it.

If an agency owner wants to be able to successfully transition from owner to retiree, there is no more important thing they can focus on than how to make their producers as successful as possible.