HRAs
Life and health insurance professionals also benefitted from the repeal of the health reimbursement arrangement (HRA) penalty. This Obama-era regulation prohibited companies from giving workers pre-tax dollars to go purchase their own health insurance coverage. The penalty was draconian: Up to $100 per day for each employee, up to $36,500 per year.
The Trump Administration eliminated this and other similar penalties, allowing companies to subsidize employees who buy their own medical coverage with pre-tax dollars. The Department of Health and Human Services also exempted association health plans and short-term medical plans from some aspects of ACA regulation.
Health agents also benefitted from the retention of guaranteed underwriting, even for those with pre-existing conditions. This meant that anyone applying during the open enrollment period wouldn’t get rejected by underwriting – making it much easier for health agents to get people covered.
The insurance industry didn’t get everything they wanted. For example, many agency principals would have liked to have seen a full ACA repeal. The reason: That would have done away with a 3.8 percent surtax on capital gains for those with incomes above certain thresholds. That percentage takes a bite out of profits every time a successful agent with a high income sells a practice.
Outlook
On the whole, the Trump Administration has been quite good for independent insurance professionals and agency heads. However, outside of the TCJA, much of the industry’s victories have been in deregulation, rather than legislation. The Trump Administration has not been able to get any traction in putting forward any kind of replacement for the ACA. and Congressional Republicans are not eager to start that fight ahead of the 2020 elections. So while the insurance industry has managed to score a number of tactical victories, a Trump defeat in 2020 would enable Democrats to ramp up regulatory actions again.
