3 Things That Insurance Agents/Brokers And The Obama Administration Can Agree On
February 11, 2015
Despite relentless criticism, the Obama administration continues to propose and create policies and programs relating to health insurance and retirement savings plans. For sure, much of the criticism is due to fear of change by an industry that is doing well for itself. If brokers are able to briefly contain their fear of the unknown, they will see that they have a lot to gain from the Administration’s many proposals.
There are three main themes to the White House’s health insurance and retirement plan proposals:
- Increase Access
- Increase Legal Protections
- Increase “Tax” Fairness
It’s a fact that more Americans have access to health insurance because of the Affordable Care Act (aka Obamacare). And while most everyone agrees that increasing access to health insurance is a good thing, Obamacare was a challenge for one group in particular—insurance brokers. After Obamacare, many insurance brokers expressed concern for their livelihood and if they could transition to a new, more drawn-out way of doing business. They also had legitimate concerns about their commissions. There is talk that some independent agents transitioned to other professions or retired, but for the most part insurance brokers did not lose their livelihood and now have a larger customer base to assist.
Increasing access to retirement plans also receives near universal praise. But unlike one law to contend with, retirement plan brokers must deal with multiple federal and state proposals aimed at increasing access to retirement plans to workers without a plan. The Obama administration’s myRA is just one of the plans that brokers need to understand to better serve existing and new clients. And while not every broker may see the need for or benefits of the myRA accounts, there’s no denying that it brought the issue of lack of access to a workplace retirement plan to the forefront.
Increase legal protections for individuals participating in health insurance and retirement plans
Health insurance and retirement plan brokers invest a lot of time and money into their profession. They pursue certifications and participate in continuing education to keep their knowledge and credentials up to date. They bring a needed and appreciated level of expertise to their clients. However, that does not mean that there are not a few bad apples that put their desire for bigger earnings above the client’s interest. Or there may be a lot of good apples that unconsciously provide advise that is less in the client’s best interest and more in theirs.
That is why increasing legal protections to everyone who pays for financial advice or guidance benefits everyone. It increases a broker’s credibility with new and existing clients. Brokers and advisors that push back on proposals that make their industry more transparent only confirm suspicions of shady behavior.
Increase “tax” fairness so that all individuals benefit equally from participating in health insurance and retirement plans
Brokers may find Administration proposals to cap favorable tax treatment of some health insurance and retirement plans difficult to support. Who wants to tell a client that they can no longer save as much as they want tax-free? However, this is an opportunity for brokers to sell a lot of different products to clients and still help them reach their goals. It is also a way to send a message to smaller clients that their business is just as important as wealthier clients.
Conclusion
Employee benefits such as health insurance and retirement plans has its roots in public policy and that’s not going to change because someone thinks that government can no longer understand what it help create. The government has a bigger interest in making sure that individuals have health insurance and workers save for retirement than any other group. It will continue to push for improvements in health and retirement plan access, legal protections and tax equity.
Smart brokers will realize that not all health and retirement plan changes advocated by the federal and state governments are bad for business.
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Denise Perkins
