Continuing Resolution to Expire January 19; Next Spending Bill May Include Important Provisions for Agents

Flood Insurance

The current short-term federal funding measure, called a continuing resolution (CR), is set to expire Friday, January 19th. Like the previous two CRs (which expired December 8 and December 22), the latest CR included an extension of the National Flood Insurance Program (NFIP). This CR lasts until January 19, when much of the funding for the federal government and, notably for agents, the NFIP, is again scheduled to expire.

PIA has been actively advocating for a long-term reauthorization of the NFIP that recognizes the critical role of agents in delivering this complicated program. As part of this advocacy, PIA National led the effort to oppose a provision included in the House flood bill, known as The 21st Century Flood Reform Act (H.R. 2874), that would likely lead to cuts in commissions for agents selling NFIP policies. Specifically, the provision would cut the Write-Your-Own (WYO) reimbursement rate by 3 points. Many WYOs have said that, for them to remain in the program, they would be likely to pass this cut onto agents through their commissions.

Congress is scrambling to come together on a deal to extend the funding for the federal government through the rest of the current fiscal year (FY) 18, which ends on September 30, 2018. NFIP could potentially be a part of such a deal, or it could be stripped out and extended on its own, to give Congress time to develop and pass a long-term reauthorization of the program. While anything is possible, it remains likely that the NFIP will stay in the funding vehicle for the remainder of FY18 and “cleanly” extended, either on a short-term basis into February or as part of a longer extension.

PIA National will continue to advocate for a long-term extension of the NFIP that either removes the problematic House bill provision or includes a substantial agent protection.

Cadillac Tax

Since the enactment of the Affordable Care Act (ACA), PIA National has been advocating for a repeal of a harmful planned health tax on employer-sponsored health plans, the so-called “Cadillac Tax."

The tax was originally slated to be implemented in 2018, but, in 2015, PIA National, along with our allies, helped to implement a delay of two years. With the tax now set to go into effect in 2020, PIA National has been encouraging policymakers to include either a full repeal of the Cadillac tax, or another delay of the tax in Congress’s next federal funding measure, which is set to expire on January 19.

The Cadillac tax, which has yet to be implemented, would apply a 40 percent excise tax to fully insured and self-funded employer health plans and would be levied on amounts higher than estimated annual limits of $10,800 for individual coverage and $29,100 for family coverage. Most experts

believe that, if the “Cadillac tax” takes effect, health costs will quickly surpass the thresholds, resulting in the tax being imposed on the vast majority of employer-sponsored health plans.

On Thursday, January 11th, the Chairman of the House Ways and Means Committee, Kevin Brady (R-TX), confirmed that the repeal of the tax is being seriously considered as part of the next funding measure. PIA National would support this effort and is continuing to encourage policymakers to include either a full repeal or, at minimum, another delay in the next funding measure to minimize the extent to which the tax would inevitably disrupt the employer-sponsored health market.