19% of REALTORS® are uninsured. Lacking affordable health insurance, many REALTORS® and other self-employed individuals had been unable to seek necessary medical attention and/or faced significant financial burdens when they or their dependents needed medical care. As part of efforts to address the health insurance needs of members, NAR has advocated for reform of the health insurance markets that provide coverage to the self-employed and small employers for more than nine years.
Among the legislative approaches that NAR has advocated are small business health options plans (SHOP), small business health plans (SBHPs), and association health plans (AHPs). AHPs allow self-employed individuals and small employers to purchase health insurance through professional or trade associations. These plans are subject to different rules than plans in the individual and small group insurance markets, and tend to be less costly. NAR continues to represent the interests of the REALTOR® community in discussions on comprehensive health reform.
What is the fundamental issue?
For more than a decade prior to the passage of the Affordable Care Act (ACA), NAR surveys indicated that approximately 28% - 33% of REALTORS® were uninsured in any given year. Consequently, NAR has long advocated for reforms in the health insurance markets that the self-employed and small employers depend upon for coverage. Among the legislative approaches that NAR has supported are small business health options plans (SHOP), small business health plans (SBHPs) and association health plans (AHPs). NAR also represented the interests of the REALTOR® community during the comprehensive health reform debate and the subsequent ACA rulemaking. Following the November 2016 elections, Republican leaders are now spearheading efforts to repeal and replace the ACA.
I am a real estate professional. What does this mean for my business?
Lacking affordable health insurance, many REALTORS® and other self-employed individuals had been unable to seek necessary medical attention and/or faced significant financial burdens when they or their dependents needed medical care. The ACA made significant changes to the underwriting and rating rules governing individual policies that created barriers to health insurance coverage for the self-employed. Rising health care costs, however, continue to create problems for hose who were not able to take advantage of the new premium tax credits that reduced the cost of coverage for low and moderate income households.
Prior to the implementation of the ACA underwriting reforms and health exchanges, NAR’s 2013 Member Profile survey found that 36% of NAR’s members had no health insurance coverage. Following implementation of the ACA’s individual mandate and the premium tax credit in 2014, the percentage of NAR members without coverage dropped to 22%. In the 2015 and 2016, the percent of uninsured members dropped 2 percentage points each year, falling to 19% in 2016.
NAR policy supports underwriting and rating rules that address the access and affordability problems that the self-employed and small employers faced in health insurance markets. NAR also supports legislation to create a federal framework that would allow bona fide trade associations to offer association health plans (AHPs) to their respective memberships.
NAR's health advocacy efforts are guided by the following policy principles approved by the NAR Board of Directors:
- The nation and its health care system are best served by having all citizens covered by health insurance.
- Health care coverage and/or insurance should be made available to all.
- Individuals should have health care coverage that is continuous, i.e. allows for no gaps in coverage.
- Individuals should have the ability to choose their preferred health insurance plan from an array of policy options that offer choices in the scope of covered services and policy costs.
- Health care coverage should enhance health and well-being by providing preventive health services and chronic disease management services.
- The health care delivery system must provide cost effective, quality care in an efficient and timely manner in order to be affordable and sustainable for society. Cost containment, therefore, must be a component of any reform effort.
- A “single payer” health care system in which the government pays for and allocates health care services should be opposed.
- Employers should not be required to offer employee health insurance programs.
ACA Repeal and Replace
January 2018 marked the beginning of the fifth year for the Affordable Care Act's (ACA) revised underwriting and rating reforms, the individual mandate that requires most U.S. residents to demonstrate that they have health insurance coverage that meets the law's minimal benefits requirements and the employer mandate that requires medium and larger-sized employers to offer health insurance to their employees.
Of particular interest to the self-employed are the ACA’s underwriting and rating rules. Under the ACA, insurance companies can no longer deny coverage to an applicant on the basis of their health status, preexisting conditions, past claims, age, gender, line of work or any other factors that the states have long allowed insurers to routinely deny an application. In addition, the ACA limits the factors used to price policies to an applicant's place of residence, age, number of covered individuals, level of coverage chosen and tobacco usage.
Since its passage in 2010, lawmakers have been either defending or fighting against the ACA. After the 2016 elections, Republicans controlling both Houses of Congress and the Administration have promised to repeal and replace the ACA.
American Health Care Act (AHCA)
Acting on that pledge, on Thursday, May 4, 2017, the House approved H.R. 1628, the American Health Care Act (AHCA) on a vote of 217 – 213. All of the Democratic Representatives and 20 Republicans opposed the bill. The legislation replaced some provisions of the Affordable Care Act. The bill then moved to the Senate where Members drafted their own version of the bill. In an early morning Friday July 28th vote, the Senate Republican leadership’s so-called “skinny” Affordable Care Act (ACA) repeal bill failed to gather the 50 votes required for passage.
The House’s AHCA would eliminate the Affordable Care Act’s (ACA) individual and employer mandates and tax penalties. To incentivize individuals to enroll anyone who goes without insurance for more than two monce would face a 30% premium surcharge when they do buy insurance. The bill replaces the ACA tax credits that reduce insurance premiums for low and moderate income households; in their place, tax credits based solely on age would be created. AHCA tax credits would top out at $4,000 per year for those aged 60-64 with no variation for regional costs of insurance. The bill also increases the ACA “age rating” rules that limit premiums for the oldest enrollees from 3 times the amount charged the youngest enrollees to 5 times that amount. The bill would eliminate most of the ACA taxes provisions, including the 3.8% tax on net investment income for very high income tax filers.
Late amendments made to the bill would also allow states to apply for a waiver for a period up to 10 years. The waiver could be used to opt out the ACA’s essential health benefit requirements which would allow insurers to cover fewer types of health care services or impose annual and lifetime limits on . A state waiver could also be sought to allow insurers to charge premiums based on health status if the state establishes a high risk pool or participates in a federal risk sharing program. States can also use the waiver and to increase a state’s age rating bands above the bill’s 5:1 ratio. Waiver applications are made to the Secretary of Health and Human Services (HHS); HHS has 60 days to respond to an application, after which the waiver is automatically granted.
While the House did not wait for the Congressional Budget Office to revise its original assessment to take into consideration amendments added, CBO has estimated that the earlier version of the AHCA would increase the number of uninsured Americans by 14 million one year after enactment and 24 million by 2026. The original bill was estimated to reduce the deficit by $337 billion over the next ten years largely from reductions to the Medicaid program and the premium tax credits. Most experts have indicated that the deficit- savings would be reduced under the amended bill.
Association Health Plans
As a part of the House’s three part reform process, on Thursday, March 22, 2017, the House of Representatives approved H.R. 1101, the Small Business Health Fairness Act (Johnson; R-TX), by a vote of 236-175. The bill amends title I of the Employee Retirement Income Security Act of 1974 to exempt health care plans sponsored by trade and business associations from most state laws and regulations. The bill would allow an association sponsoring a health care plan to choose the health benefits included in the plan, as long as the plan meets certain federal and state statutory minimums. These association health plans (AHP) could not make membership, payment, or coverage conditional on the health status of an enrollee.
The bill moved to the Senate for consideration where previous versions of this bill have not garnered the necessary support to advance in prior Congresses. Senator Mike Enzi (R-WY) is currently working on a Senate bill. NAR is once again working with a coalition of trade associations to advance AHP legislation.
On January 5, 2018, The Department of Labor (DOL) issued a Notice of Proposed Rulemaking (NPRM), in accordance with an Executive Order issued by the President, that would expand access to health coverage through Association Health Plans (AHPs). The rule broadens the definition of “employer” to include “working owners” (sole proprietors/self-employed) under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law governing the conduct of employee benefit plans, including employer-sponsored group health plans, which sets minimum standards and protections for participants.
In a comment letter submitted on March 6, 2018, NAR expressed mostly strong support for the proposed regulation, which modifies and broadens the definition of “employer” to include “working owners,” opens the door to potentially allowing trade associations, including NAR, to offer health insurance coverage to members through the large group insurance market. In the letter to regulators, NAR recommended changes to the proposed eligibility requirements to maximize participation among self-employed real estate professionals. NAR encouraged the Department of Labor to reconsider a provision preventing working owners from participating in an employer health plan if subsidized coverage is available to them through a spouse’s employer; however, that may not always be the most affordable option for a family.
NAR will continue to advocate for the aforementioned principles that promote universal access to high-quality, affordable insurance options and remove burdensome regulations that drive up costs as the AHCA and a Senate bill and association health plan legislation move forward.