Q. You’ve been following national health care reform closely. What is your perception? Is what passed this year still going to be the law one year from now? three years from now?
A. I was in Washington D.C. just before the Health Care Reform law passed. The “mantra” from both sides of the aisle was to “pass and fix it”. All the legislators that I spoke to said that in their opinion it was not a perfect bill, but there was this sense that something had to be done. Do I think it will be the law in one year, three years from now? Yes. If anything I think our legislators will tinker and fix things, but over the next few years I don’t believe the law will be repealed but I would anticipate that there will be significant refinement through the promulgation of regulations.
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Q. What’s the biggest hidden aspect of the law that surprises the business community when you discuss it?
A. That’s easy. The rule requires businesses to report to the Internal Revenue Service payments to suppliers and service providers that exceed $600 in a single year. Most people are not aware of that part of the law and what a major impact it will have on their businesses.
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Q. In a presentation you made on health care reform, you spoke about a reinsurance program to reimburse employers for up to 80% of coverage for retirees between ages of 55 and 64. What’s the true purpose of that subsidy? Seems like it is aimed at getting people to retire younger and free up jobs.
A. The original intent of this part of the law was to assist employers who provide coverage to those retirees and to help those people between the ages of 55 and 64 to maintain their health insurance. Most of the people who retired in that age bracket could not qualify for coverage in the individual insurance either due to cost or medical underwriting;  the coverage they receive from their employers is critical. The government just released the numbers and the list of the companies and organizations that applied for this subsidy and it showed that The Department of Health and Human Services’ Office has approved nearly 2,000 plans representing employers and unions approved into new program. I would assume that is thousands of retirees.
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Q. What’s the cost of dependents being allowed to stay on parents’ health insurance until age 26? That seems to be a population that should be covered by employers’ plans because they should be finished with their education and working.
A. The overall cost of adding dependents to an employer is between 1% and 2% of the employer’s health care costs, which of course doesn’t sound like a lot, but can be substantial, particularly when you go from a smaller group to a larger group. One estimate was that there will be an approximate 1 million dependents coming back onto employer plans under this part of the law. As for whether these dependents should be covered under their parents employer’s  plans is a debate. Â
Q. Connecticut is receiving a $1 million grant to study health insurance premiums. What does Connecticut not know about health insurance premiums that this $1 million might uncover?
A. This is a good question, especially since we are home to the “insurance capitol” and the Connecticut Department of Insurance has always done an excellent job reviewing and justifying rate increases. My understanding of this $1 million grant was one that would either be accepted or would be lost. I suspect that the department will use the grant for improvements in information technology in the rate review process whereas other states without the insurance expertise we have may use the grant for more basic development.
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Q. There’s a $500,000 limit on health insurance executive compensation deductions. Are we going to see executives leave the field or are companies going to set up shell corporations so the executives aren’t just working in health insurance?
A. I’m not sure but health care is a national problem, which will require our best people in every step of the delivery system including the insurance industry. I would hope that this cap would not operate as an impediment to the industry employing the best talent that can be found. Regulations will be critical to whether this aspect of the law produces an unanticipated and undesired consequence-as the nation’s insurance capital, we will likely be among the first to know.  Â
