Monthly Archives: July 2018


On January 4, 2018, the U.S. Department of Labor (DOL) announced proposed rules to expand the
opportunity to offer employment-based health insurance to small businesses through Association
Health Plans.

On June 19, 2018, the Trump Administration released a final rule as well as a fact sheet on the new rule.
The rule was in response to an executive order issued by President Trump on October 12, 2017 directing
federal agencies to expand the availability of AHPs, short-term limited duration insurance policies and
Health Reimbursement Arrangements. The proposal calls for a revision to ERISA in order to redefine
“employer” to allow more groups to qualify as associations and treat health coverage sponsored by an
employer association as a single group health plan that would not be subject to the ACA’s ten essential
health benefits required in the consumer and small group markets.

The goal of the Administration’s rule is to provide small-business owners, employees of small businesses and
family members of working owners and their employees with more coverage options, more affordable pricing,
enhanced ability to self-insure, less regulatory burden and complexity and reduced administrative costs.

Under the final rule, self-employed individuals, sole proprietors and common-law employees would be
permitted to join an AHP.
The final rule does say that there must be at least one other service, e.g., education, offered to members
so that the association cannot solely exist to provide health insurance. Allowing the self-employed without
employees to join is beneficial as they were excluded in 2014 when they could no longer get group coverage,
but there is a risk of anti-selection. It was suggested that they should have one open enrollment season to
avoid any anti-selection. Although the final rule does not mandate one enrollment period, it does allow the
association to incorporate the suggested rule.

State laws are not preempted, which means the final rule will apply to them.

New York State DFS (New York State Department of Financial Services) has reported that the Trump
Administration’s final rule expanding the role of association health plans won’t prevent its authority to
regulate health insurance.

New Jersey DOBI (New Jersey Department of Banking and Insurance) has reported that it will not allow
non-compliant plans.

Delaware currently allows a Delaware-based employer to participate in an association plan from another
state if that state allows it and the Delaware group is a member of that association.


ƒƒ New Jersey is the second state after Vermont to enact an individual mandate, which becomes effective
January 1, 2019.  The purpose of P.L. 2018, Chapter 31 is to stabilize the market and help keep health insurance premiums
as low as possible.  The tax applies to all New Jersey residential taxpayers. Hardship exemptions shall be determined by the State Treasurer.  The mandate requires individuals to maintain minimum essential coverage (MEC) or pay a penalty.
ƒƒ The amount of the tax penalty is the New Jersey average premium for bronze level plans, $695 or 2.5% of income, whichever is greater. “Income” is defined as household income minus any deductions.

The tax will be collected via the New Jersey income tax return.

United AARP adds SC hospitals to Medicare Plans

We have some new network additions to report!


  • Abbeville Area Medical Center—effective February 1, 2018
  • Williamsburg Regional Hospital—effective April 1, 2018
  • The Regional Medical Center Orangeburg Calhoun—effective June 1, 2018
  • Georgetown Memorial Hospital—effective June 1, 2018
  • Waccamaw Community Hospital—effective June 1, 2018
  • Springs Memorial Hospital—effective June 1, 2018
  • Carolinas Hospital System Marion—effective June 1, 2018

Buying Life Insurance Online? Think again…

It seems so simple. Type “cheap life insurance” in google and you get 24,300,000 hits.   “No Exam Life Insurance!”  “Rates from $4.80 per month.”  Marketing can be so misleading.  Lets look at the facts…


How your health affects rates-   Insurance companies rate you based on a number of factors. Generally, if you are of “normal” height and weight, take no medications, don’t smoke and have not had any significant health issues in the past, you will probably get preferred. While companies may use different names, the rating categories (best to worst) are superpreferred, preferred, Standard Plus, Standard, and then rated.

Can I really get “Super-preferred?”- In fact we got a client this rating today, so it does happen. However, internet rates are often bait-and-switch– they promise you a low price based on this great rating, only about 5% will actually qualify!  Why? To get this incredible rate, you not only have to be superhealthy-  you also have to have no moving violations, and no history of cancer, diabetes, or heart problems in your family.

Why you need a broker- Rates are filed and preapproved with the state, and they are what they are. Everyone accesses pretty much the same rate database, so no one has a “better rate.” However, there are a lot of variables. Insurance underwriters look at illnesses differently, so a company may rate you standard for your problem, and another one might rate you standard plus – with a cost savings. Your broker will know that, and may have a little pull if you are on the fence between two rating categories.

What about the big name insurance companies? There are a lot of companies that use “captured” agents- they can only sell their employers products. They advertise a lot, to get people to know their names. Fact is, advertising costs money, and that tends to raise rates. Furthermore, since they only have one outlet, they can only sell you their product, even if its not the best one for your situation.

How different are rates between companies?

If we look at a 30 year old man, purchasing $500,000 of 20 year term insurance, here is the range of monthly premiums for 21 carriers:

Preferred Plus-            $20-$38

Preferred-                   $26-$45

Standard Plus-             $33-$56

Standard-                    $38-$66

So, if you chose the right carrier, you could be at $26 a month, while another carrier might be $56 for the same coverage- because they rate you differently and have higher rates. This difference is similar across all ranges of age and coverage.

Speaking to a knowledgeable broker doesn’t cost you anything, but believing everything you read on the internet? It might!





Responding to Pay or Play Mandate Letters

If you have gotten, or may receive a non-compliance pay or play letter from the IRS, this important article can help you through the process.

Published in Employee Benefit Adviser on July 6, click here for full article.

These letters can range from the employer paying the penalty outright, paying a portion of the penalties, none of the penalties, attend an IRS hearing disputing the penalties or pursue further legal action in federal court.  To give the accused a chance to plead their case, Letter 226-J gives employers the opportunity to refute the assessed penalty amount by filing Form 14764. Depending on the applicable large employer’s response the IRS has begun to issue one of five versions of IRS Letter 227 as a response to the action the employer chooses to take on Letter 226-J.


July 2018
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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck