Health Care Reform: What’s the Impact on You?
Now that health insurance reform is signed into law, what is the impact on real estate brokers and sales associates?
First, if you are an individual who buys your own coverage and have a policy you like, your coverage would be “grandfathered” and would be considered “qualified coverage.” If you are an employer who already offers health insurance to your salaried workers, you may continue to offer the plan you have. Your existing plan is “grandfathered” and you are deemed in compliance with the new employer mandate. You may continue to enroll new employees and terminate those employees who leave the firm without jeopardizing this grandfathered status.
Second, the law creates a uniform, national set of insurance ratings and underwriting standards. These new rules spell out the criteria that insurers can use when evaluating an application. The goal of the new standards is to create a set of rules that more closely resemble what most folks think of as the rules that apply to a group policy.
Insurers can charge different premiums based on policy holders’ factors such as age, the type of policy purchased, and geographic area. Insurers can’t, however, deny coverage or base premiums on an applicant’s preexisting condition, claims history or gender. This is a significant change from the current rules in the great majority of states.
Second, the law will seek to expand the individual and small-business insurance markets, which are the markets through which real estate brokers and sales associates principally shop for coverage.
The goal is to increase access to affordable coverage by increasing competition among insurers, in part by expanding the pools of insureds (with a new requirement for all individuals to have coverage), encouraging insurers to enter new markets, and by allowing markets to cross state lines, among other things. The eventual goal is to merge the individual and small group markets into one larger market. In either case, independent contractors will be able to shop for coverage in both the individual and the small-business markets, so their options will be increased.
Third, the law creates the insurance exchanges that received so much attention in the media. The exchanges are in effect the new insurance marketplaces through which individuals and small employers will shop for coverage. Because insurance ratings and underwriting standards are made more uniform under the law, shopping for coverage through the exchange’s online services or through an insurance broker is simplified, at least in theory, because comparison between plans is made easier.
Fourth, the law requires individuals to buy health insurance and gives incentives businesses to make health insurance available to their employees. That means practitioners will have to buy coverage if they don’t already have it or face a penalty unless they can show they can’t get coverage for less than a certain percentage of their income–10 percent–or or would otherwise face a financial hardship. If they can’t get an exemption for one of these reasons, they pay a fine.
The employer mandate covers businesses with more than 50 employees. Most real estate brokerages, as small businesses with fewer than 50 employees (the sales associates, as independent contractors, don’t count against the employee total), are expected to be exempted from the mandate. Large employers subject to the mandate that fail to comply face a penalty. Affordability credits, to help offset costs, are available to both individuals and very small employers, including very small nonprofit associations that are employers.
More detail on the potential impact on real state practitioners and brokers is at REALTOR.org/healthreform.
Have a say!
What do you think about the health care bill? How has it impacted you?
Source: REALTOR® Magazine Online
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