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Threat Emerges to The Market for Employer-Sponsored Coverage

Threat Emerges to The Market for Employer-Sponsored Coverage

Update: March 8, 2017

Employer Exclusion Stays

On the evening of March 6, 2017, House Republicans released the American Health Care Act (AHCA). Early drafts of the AHCA would have capped or eliminated the employer exclusion as discussed in our article below, but the final draft leaves the employer exclusion in place, unmodified. This is excellent news for those who benefit from or sell employer-sponsored coverage. This NAHU press release provides a brief summary. Claremont will keep you posted as more is known about the provisions of the AHCA and how they may affect your clients and your agency.


March 7, 2017

Threat Emerges to The Market for Employer-Sponsored Coverage

Congressional Republicans are considering capping or eliminating the tax-free status of employer-paid health benefits (the “employer exclusion”). This startling proposal was part of a draft ACA replacement plan released the week of February 27th. Eliminating or capping the employer exclusion represents a direct threat to the stability of the group benefits market and hurts all who sell or enroll in employer-sponsored coverage.

This proposal would make the employer’s contribution to an employee’s (and dependent’s) health coverage, taxable to the employee, taking away a key advantage of employer-sponsored coverage. The National Association of Health Underwriters (NAHU), which advocates on behalf of brokers and is normally conservative in their public statements, said it is:

“…very concerned about these proposals as they would undermine the employer-sponsored health insurance system that provides coverage for more than 175 million Americans.”

This is not typically the kind of language you see coming from NAHU, so we sat up and took notice.

What can you do?

  • First, get informed. If you haven’t already, read NAHU’s excellent Issue Brief on the employer exclusion.
  • Second, if you share our concern and NAHU’s and want your voice to be heard, participate in Operation Shout! regarding the employer exclusion. By submitting the form, your congressional senators and representatives will receive an email from you with a thoughtful, fact-based objection to any legislation or regulations that eliminate or cap the employer exclusion.
  • Third, if you aren’t already a member, join NAHU. See Claremont’s sponsorship offer below.

About NAHU
Their mission is to advocate on behalf of brokers and to provide services that improve brokers’ professional skillsets. Congressional representatives from both parties and government regulators routinely seek out NAHU’s input on health insurance matters. NAHU is a well-respected, apolitical organization that advances thoughtful proposals on brokers’ behalf and that sponsors excellent educational and professional development opportunities. The monthly Compliance Corner webcasts alone are worth the value of membership.

Just a few weeks ago NAHU organized its annual Capital Conference in which members had the opportunity to hear from and meet with congressional representatives and their staffs to voice their concerns about pending healthcare reform. NAHU is the national organization, each state has its own chapter and each region within a state has a chapter. If you are health benefits professional you should consider joining NAHU, attend your local chapter meetings, and take advantage of everything NAHU has to offer.

Rick Coburn, President of the California Association of Health Underwriters (CAHU) states:

“We are at the beginning of an exciting and challenging period. Not only does our association have the opportunity to influence the future direction of health care financing by advising the new administration on the effects of its policies on consumers, but we also must organize our resources against a single-payer bill in the California legislature by stressing its dangers to the private marketplace. You can make a difference. Thank you for your membership.”

Sponsorship Offer – To encourage you to join NAHU, Claremont will sponsor NAHU memberships by paying one month’s dues ($40 value) for the first 15 brokers that contact us. Simply contact us at to become a member with the Claremont sponsorship.

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