IHC Group

Independence Holding Company

Oct 30, 2018

IHC Ideally Situated to Assist Individuals, Families and Employers with New Federal Rules on HRAs and ACA State Innovation Waivers

STAMFORD, Conn., Oct. 30, 2018 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today endorsed the proposed rule released by the Departments of Health and Human Services, Treasury and Labor (collectively referred to as the “Departments”) that, if adopted, will provide a new way for employers to provide health insurance to their employees using health reimbursement arrangements (HRA). The proposal would allow employers of any size to utilize a tax-advantaged HRA to relieve the administrative burden of offering group benefits to employees. Employees could use the funds to purchase individual medical coverage, including short term limited duration insurance (STLDI), which can last up to 364 days in certain states. Because STLDI policies are medically underwritten and do not cover all essential health benefits, they are often significantly less expensive than Affordable Care Act (ACA) plans. In their final rule released in August 2018, the Departments cited to a recent study that concluded that the least expensive short-term limited-duration insurance policy often costs 80 percent less than the premium for the lowest-cost individual market bronze plan in an area.1     

According to a fact sheet posted on the Department of Labor website (https://www.dol.gov/sites/dolgov/files/OPA/factsheets/wh-hra-factsheet.pdf) up to 800,000 firms may take advantage of this proposal to offer coverage to 10 million employees. David Kettig, President of Independence Holding Company, commented, “In today’s competitive job market, offering a strong benefit package is key to attracting and retaining talent. Historically, small employers that have wanted to offer their employees pre-tax health benefits have had to incur the expense of managing an employer sponsored group plan. This rule offers them an alternative. It would permit small employers to fund HRA accounts for their employees with pre-tax dollars which the employees could use to either purchase an ACA or an STLDI policy. In essence, the Administration’s proposed rule helps level the playing field for smaller companies when it comes to health insurance offerings. In addition, the Trump Administration has provided guidance that grants state governments more freedom, as a result of the expansion of the 1332 waiver programs, to implement new coverages that are potentially more affordable alternatives to ACA plans."

Mr. Kettig also stated, “As we have previously reported, IHC’s insurance companies are very well positioned to participate in the expected growth in the market for STLDI as a result of being able to sell these policies for longer durations and, beginning January 1, 2019, there not being a tax penalty for individuals who do not have ACA compliant plans. We are even more optimistic about our future results due both to the proposal to allow HRA funds to be used to purchase STLDI policies and to the guidance on expansion of 1332 waivers. We have expertise both in STLDI and in the small group space as well as multiple distribution sources, including our Healthedeals call centers and over 5,000 Advisors and contracted producers nationally who can assist consumers in determining which coverage is best for them. Our short term medical portfolio is unique in that we combine a broad geographic footprint with leading edge plan designs such as Connect Plus, which is the only short term medical plan that offers limited coverage for certain pre-existing conditions of up to $25,000 and Fusion which combines short term medical insurance and first dollar fixed indemnity benefits. In addition, we look forward to working with state regulators to use STLDI or develop new IHC products to meet the innovative ideas arising from the expanded 1332 waiver process.”

About The IHC Group

Independence Holding Company (NYSE: IHC), formed in 1980, is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its subsidiaries (Independence Holding Company and its subsidiaries collectively referred to as “The IHC Group”). The IHC Group consists of three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), and IHC Specialty Benefits, Inc., a technology-driven full-service marketing and distribution company that focuses on small employer and individual consumer products through general agents, telebrokerage, call centers, private label arrangements, and through the following brands: www.HealtheDeals.com; Health eDeals Advisors; www.PetPartners.com; and www.PetPlace.com.

Forward-looking Statements

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

1Karen Pollitz, Michelle Long, Ashley Semanskee, and Rabah Kamal, “Understanding Short-Term Limited Duration Health Insurance”, Kaiser Family Foundation, April 23, 2018.  Available at https://www.kff.org/health-reform/issue-brief/understanding-short-term-limited-duration-health-insurance/.

CONTACT: Loan Nisser
(646) 509-2107
www.IHCGroup.com  

Source: Independence Holding Company