What Health Reform MeansWhat Health Reform Means For You And Your Business

Clint Jones, CEO Norvax : Jessica Waltman Senior VP, NAHU

PanelistsPanelists

– CEO, Co-Founder NorvaxI 500 C

– Sr. VP of Gov. Affairs, NAHU24 000 M b

Clint Jones Jessica Waltman

– Inc 500 Company – 24,000 Members

ImplementingImplementing Health Care ReformHealth Care Reform

Where We Are N ti l A i ti f H lth U d itNational Association of Health Underwriters

Recap on Legislationp g• President signed Patient Protection and Affordable

Care Act (PPACA) on March 23Care Act (PPACA) on March 23• Makes significant statutory changes affecting the

regulation of and payment for many types of private g p y y yp phealth insurance – many insurance market reforms

• Will require almost all private sector employers to evaluate the health benefits they currently offer and consider whether they are compliant

• For those without access to employer coverage, new individual mandate to purchase and maintain

i iminimum coverage

“September 23” ReformsSeptember 23 ReformsAll individual and group plans, including self-funded

and grandfathered plans• Prohibition on lifetime limits and strict annual limit

requirements through January 1, 2014• Strict limits on health coverage rescissions• Coverage of dependents to Age 26• Coverage of preexisting conditions for children under

age 19 (individual plans only—grandfather status applies for group plans)

“September 23” Reforms Non Grandfathered PlansNon Grandfathered Plans

• Preventive care without cost sharing– Very specific benefitsVery specific benefits

• Nondiscrimination rules under IRS Code 105(h) applies to fully-insured plans

• Pre-Ex Restrictions (group plans)– Plans may not impose any preexisting condition restriction on children

under the age of 19.under the age of 19. – After January 1, 2014, plans may not impose preexisting condition

restrictions on anyone

• For all group and individual plans including self insured• For all group and individual plans, including self-insured plans, emergency services covered in-network regardless of provider

Recent RegulationsRecent Regulations

• Most 2010 regulations have been issued:Most 2010 regulations have been issued:– Dependent to Age 26– Retiree Reinsurance Programg– Insurance Plan “Grandfathering”– Annual and Lifetime Limits for “Essential Benefits”– Small Business Tax Credit– Preventive Services

M di l L R ti– Medical Loss Ratios

Medical Loss Ratio RequirementMedical Loss Ratio Requirement• 85% Large Group and 80% Small Group/Individual

NAIC h d i h d i i d fi i i b• NAIC was charged with determining definitions, rebate process

– Passed resolution in support of Agents in August and sent multiple letters to DHHS– Attempt to amend NAIC MLR regulation definition of earned premium to exclude agent

commissions was withdrawn– DHHS and NAIC agreed to a taskforce to resolve this issue

DHHS h d ith i l ti tifi ti• DHHS charged with governing regulation, certification, enforcement, regulatory authority, waiver process

– IFR issued on December 1 does not provide adequate compensation relief– Individual market waiver with agent/broker access and compensation a market disruption

criteria– DHHS still meeting regularly with the NAIC

MLR• NAHU pursuing a multi-faceted strategy• MLR is our #1 Legislative/Regulatory Priority• Avenues we are working on include:

– working with state legislators, insurance regulators, and governors on state-related action

– providing media outreach about the impact the requirements will have on consumer access to agents and brokers and private-sector insurance jobsj

– helping states with MLR waiver applications– continuing talks with DHHS

working with members of Congress on a permanent legislative– working with members of Congress on a permanent legislative solution

ExchangesNAHU h f l d ti f h• NAHU has formal recommendations for exchanges– Developed Exchange Working Group

• NAIC issued basic framework of a model• NAIC issued basic framework of a model– NAHU submitted comments on model– NAHU has a modified model with a governance structure that g

allows for a very specific role of the agent

• HHS requested comments relating to specific iquestions

– NAHU met with HHS during the last few weeks– NAHU submitted formal comments– NAHU submitted formal comments– Also discussed relationship of portal and exchange and how

agents and brokers could be used

Key Exchange IssuesKey Exchange Issues

• State-based exchange not federal interventionState-based exchange, not federal intervention• Role of the agent/broker and role of navigators

i f id k• Preservation of an outside market• Reasonable governance structure• Separation of Risk Pools• SubsidiesSubsidies• Assessments

Moving AheadMoving Ahead• Election Results—Changes to Congress

– Factors to Consider:• Historic number of new legislators• Tremendous turn-over in staff and committees• Need to off-set repeal changes with other spending cuts

H ti ill b t d b ti ht D ti j it i th S t d• House actions will be tempered by tight Democratic majority in the Senate and President Obama

• GOP will need to balance delivering on promises now and goals for 2012

– NAHU has already engaged in multiple conversations with partyNAHU has already engaged in multiple conversations with party leadership about what realistic improvements can be made to PPACA in the short-term, and what may need to wait until 2012 and beyond.

• Election Results—Changes to States• Election Results—Changes to States– New Governors will have a tremendous impact on PPACA implementation– Potential change for 20 + state insurance commissioners– Historic number of new state legislatorsg– Enormous education and policymaking opportunity for agents and brokers

Moving Aheadg• Legislation to fix MLR problem by excluding commissions from the

calculation completely—technical correction• New Congress—Targeted health reform legislation centered onNew Congress Targeted health reform legislation centered on

business friendly adjustments/low-hanging fruit– 1099 requirements– 105 (h) non discrimination( )– MLR requirements– Small business affordability requirements– Grandfathered plans– Exchange provision adjustments– Transition and changes to rating requirements– CLASS ACT

L t f i t t i ki dj t t d d h th t• Lots of interest in making adjustments—depends whether or not Congress and Obama are serious about making reasonable changes or if they will just play politics

Moving AheadMoving Ahead

• NAHU visibility is highNAHU visibility is high• Broker role in the spotlight

i i i• MLR is our top priority• Press initiatives• Grassroots efforts• Public Relations initiativesPublic Relations initiatives• Community service highlights

B i f i dl i i i i• Business friendly initiatives

Don’t Just Survive…Thrive!Don t Just Survive…Thrive!

How to Position Your BusinessHow to Position Your Business• Efficiencies – Find Them!• Cross-SellingCross-Selling• Product/Market Diversification• Commission Changes – How Do You Grow?Commission Changes How Do You Grow?• How Can Norvax Help?

Create a More Efficient ModelCreate a More Efficient Model

What Areas Can You Improve On?What Areas Can You Improve On?• Marketing / Lead Generation• Quoting / Product ComparisonQuoting / Product Comparison• Education• EnrollmentEnrollment• Customer Service• Client RetentionClient Retention

Cross SellingCross Selling

How Effective Are You?How Effective Are You?• Product Education – What do your carriers

offer?• Dental, Vision, Critical Illness, Accident, Life

• Client Education and Consultation• Are you asking the right questions? Are you

determining additional needs through a consultative sales process?sa es p ocess

• Set Goals – 30% Cross Sale Target

Product/Market DiversificationProduct/Market Diversification

Do You Have Blinders On?Do You Have Blinders On?• Too Much Focus – Are you missing

opportunities?pp• 8,000 Boomers Turning 65 Daily in 2011

• Are you helping them navigate a complicated system?

• Internet Traffic – Medicare searches growinggrowing…

• Referrals – Can I help your parents?

Commission ChangesCommission Changes

Before Commission ChangesBefore Commission Changes• Average Premium = $3,000

(individuals/families)( )• Average Commission = 20%• Annualized Commission = $600• 12 App’s Per Month (3/week) = $7,200• Annual Income = $86,400 (before renewals)( )

Commission ChangesCommission Changes

After Commission ChangesAfter Commission Changes• Average Premium = $3,000

(individuals/families)( )• Average Commission = 12% (10% + Bonus)• Annualized Commission = $360• 12 App’s Per Month (3/week) = $4,320• Annual Income = $51,840 (before renewals)( )

How to Make the Same -A illAncillary

4 Additional Major Med + Ancillary4 Additional Major Med + Ancillary• $ 51,840 from $ 86,400 ($34,560)• Increase App Count from 3 per week to 4Increase App Count from 3 per week to 4• 16 Major Medical Apps Per Month = $69,120• Identify additional client needs throughIdentify additional client needs through

analysis• Set a Goal of 30% for Cross Sellingg• 4 Ancillary Sales Per Month = $1,100• Total Income = $82,320 (before renewals)

How to Make the Same -M diMedicare

Expand Your Reach into MedicareExpand Your Reach into Medicare• $51,840 from $ 86,400 ($34,560)• Continue Selling 3 Major Medical PoliciesContinue Selling 3 Major Medical Policies

Weekly• Start Offering Medicare Supplementsg pp• Sell 2 Medicare Supplements Per Week• 8 Medicare Supplements Per Month = pp

$34,560• Total Income = $86,400 (before renewals)

How to Thrive?How to Thrive?

Expand Markets and Cross SellExpand Markets and Cross Sell• 4 Major Medical Policies Per Week• 30% Cross Sell Strategy30% Cross Sell Strategy• 2 Medicare Supplements Per Week• Total Income = $119 520 (before renewals)Total Income $119,520 (before renewals)

How Can Norvax Help?How Can Norvax Help?

Technology & Lead GenerationTechnology & Lead Generation Solutions• Quoting and Online Enrollment• Quoting and Online Enrollment

• Major Medical• Ancillary• Medicare

• Cross Selling Technology• Product Bundle Presentation

• Virtual Training Classes• Weekly Webinars• Weekly Webinars• Top Producer Forum

How Can Norvax Help?How Can Norvax Help?

Technology & Lead GenerationTechnology & Lead Generation Solutions• Quality Lead Generation• Quality Lead Generation

• Individual & Family• Medicare

• Carrier Sponsored Marketing Programs• Earn Marketing Credits for Production

Thank YouThank You

Questions?reformsuccess@norvax.com@