Industry leaders praised Congress for passing an omnibus billDec. 18 that delays the Affordable Care Act's so-called "Cadillactax" and also passes the Policyholder Protection Act. Thelegislation, which is part of a larger bill that funds the federalgovernment, was approved on both sides of the aisle in both theHouse (316-113 vote) and Senate (65-33).

Tax has been delayed until 2020

"The Big 'I' has been greatly concerned about the impact of theACA's 40% excise tax since the day the ACA was signed into law,"says Robert Rusbuldt, president of the Independent Insurance Agents & Brokers of America(IIABA or Big 'I') and CEO, in a statement. "We believe thetwo-year delay of the tax is an important first step, andindependent agents around the country can rest assured that the Big'I' will continue to fight to fully repeal the tax. We look forwardto working with Congress in a bipartisan manner to ensure this taxnever sees the light of day. Now that both the Senate and the Househave passed this important legislation, we urge the President topromptly sign it into law."

"PIA is encouraged by the two-year delay in the implementationof the 'Cadillac Tax' that was negotiated as part of the budgetagreement, however we will continue to push for outright repeal ofthis onerous tax on healthcare benefits," says Jon Gentile, vicespresident of government relations for the National Association ofProfessional Insurance Agents. "The 40% excise tax on what wasincorrectly termed 'overly generous' health plans in reality wouldimpact moderate-benefit plans that middle class Americans rely onas well as the employer-sponsored health insurance market. Weapplaud this delay in the Cadillac Tax and view it as a prelude toits repeal."

Implementation of the 40% excise tax was scheduled to go intoeffect in 2018, in which the ACA levied a tax on health benefitsthat exceed an established cost. The tax has been delayed until2020.

Commitment to state regulation of the insurancemarket

Also wrapped into the omnibus bill, the Policyholder ProtectionAct (PPA) reaffirms that state insurance regulators havethe authority to safeguard the capital of insurance companies thatare part of larger diversified financial institutions. It alsoprevents the regulators from the Federal Deposit InsuranceCorporation from transferring the assets of a state regulatedinsurance company or subsidiary to an affiliated bank if stateinsurance commissioners believe such a transfer would be harmful topolicyholders. The PPA passed the full House in November, andthrough the Senate on Dec. 18.

"This legislation greatly improves the ability of stateinsurance regulators to protect policyholders by ensuring thatinsurance companies structured under larger financial firms are notheld financially responsible for an affiliated bank's failure orfinancial crisis," Gentile says in a statement. "This common-senseconsumer protection legislation is designed to ensure that themoney set aside to pay insurance claims is not appropriated by thefederal government to bail out 'too big to fail' financialinstitutions."

 "The passage of the 'PolicyholderProtection Act' further exemplifies Congress' commitment to stateregulation of the insurance market," says Charles E. Symington, Big"I" senior vice president for external and government affairs, in astatement. "This bill defends policyholder assets and ensures thatcarriers will be able to operate as intended by making theprotection of policyholder assets their first priority."

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