INSIDE THE INDUSTRY HEALTH INSURANCE VIDEO SERIES

Understanding the One Big Beautiful Bill for Group Health Insurance Agents with Janet Trautwein

Join Janet Trautwein, Vice President of Large Segment & Compliance at Warner Pacific, and Allison Babberl, Content Marketing Manager at AgencyBloc, for a discussion about the One Big Beautiful Bill. We discuss what the bill presents, how it will affect group benefits agents this enrollment season, and also the implications for the individual ACA marketing.

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Inside the Industry: Understanding the One Big Beautiful Bill for Group Health Insurance Agents with Janet Trautwein

Inside the Industry is a recurring video series hosted by AgencyBloc to take an insider's look at the health, group benefits, and senior insurance industry. Learn more about what's happening right now, what it means for your agency, and how your team can stay ahead of these changes.

Transcript for the Episode

Note: AB denotes Allison Babberl, and JT denotes Janet Trautwein.

Allison Babberl: Welcome everyone. My name is Allison Babberl, and we're back again with another edition of our Inside the Industry. Today I'm joined by the very fabulous Janet Trautwein. Janet is the Vice President of the Large Group Segment & Compliance at WarnerPacific. And we're here to talk about the One Big Beautiful Bill. Thanks so much for joining me today, Janet.

Janet Trautwein: Thanks for having me. It's a real privilege to be asked to talk to all the people that are your followers and your fans and customers.

AB: Well, I'm just so honored you think I have fans. But as I said, One Big Beautiful Bill. It's the words on everybody's mind. Everybody's asking about it. Tell me more about what is the One Big Beautiful Bill? How is it affecting group benefits brokers?

JT: Sure. there were a lot of things that were in the bill. A lot of them were little things. So in terms of being on the group side, the biggest changes were, number one, the biggest change is what was not in there. So what was not in there and what we kind of expected might be touched on is some sort of playing around with the tax exclusion on employer provided benefits. You know, we were really concerned that they might, since this was a budget reconciliation bill, they might try to tap into some of the revenue, the lost revenue associated with that and maybe put some caps on that. It's extremely controversial. Everyone has lobbied for years for this not to happen. It would very much disrupt the employer market. However, they did not do that, probably not wanting to take on that kind of controversy and slow the whole thing down because it would have enabled an army to come out. But it was not in there and that was great news. But what was in there, there were a lot of things in there that had to do with HSAs.

And if you think back when HSAs first came around, they were actually passed when the Medicare Modernization Act was passed. So think of when Part D came in, and this was a long time ago. And so the definition of a qualified high deductible health plan for an HSA is actually pretty antiquated and it needs a little bit more work than the changes that they made, but they did make some very important ones. The first and most important one is one that they made initially during the COVID period. So we all know that during COVID, a lot of us got sick and a lot of people did, but they were not always able to get to in-person medical care. And maybe you didn't even want them in the doctor's office to spread it to someone else when what they needed was clear and it could be handled via telemedicine. So during that time, the telemedicine, which normally would have disqualified someone from being able to contribute to their HSA account, was permitted out of a public health issue. So it didn't mess with their ability to make these contributions. Because, the basic HSA rules say that in order to contribute to a health savings account, you have to be covered by a qualified high deductible plan and no other plan that is not a qualified plan. And that means that anything that comes ahead of the deductible is no. And that's a real antiquated definition, to be honest, because, you know, think about it now. Back then, deductible health plan was the exception not the rule. Now everyone has a high deductible health plan.

And, we, we're going to see more changes in the working on this plan. These are the things they were able to do in this bill. So what happened back to the telemedicine is that COVID provision, the public health emergency expired at the end of last year. And so anyone, and I'm not saying a lot of people weren't out of compliance because a lot of people continued right on with their telemedicine benefit and sort of ignored the fact that technically it was not allowed if you had the HSA option. But there was a lot of bipartisan support because people had seen the benefits of having this expanded source of care. Republicans and Democrats alike were very much in favor of renewing this and just making it permanent. So they did that in the One Big Beautiful Bill. That was one of the most important things that they did.

And very important, they made it retroactive back to the first of the year. So there was no gap for all those people that made no changes. Everything is fine. And they can continue on and offer the telemedicine benefit. And people who have selected an HSA for their plan option can still access telemedicine without worrying about interfering with their ability to contribute to their HSA account. Super important. It affects group accounts, also individual and the individual market as well. It's anyone who has an HSA. The second thing, which is absolutely amazing and I think that people don't realize how good this is, is the ability to have a direct primary care arrangement and also have that not affect your ability to contribute to an HSA.

AB: Yeah, tell me.

JT: So a lot of people, and I'm not just talking about like concierge medicine, there are a lot of national telemedicine companies out there, not telemedicine, telemedicine and direct primary care, sometimes they're combined, where you can access in-person medical care, same or next day, with a physician through this direct primary care arrangements. It's separate from your insurance plan. And in the past, that was not allowed. It would disqualify you from making a contribution to an HSA. And now they're saying, yes it is. This is just in the same category as the telemedicine and we're gonna allow you to do it. And there are some dollar limits associated with it, but they're well within the range of what the charge is for most of these. And it's a really good thing actually, you know, for brokers to think about offering to their clients.

As in addition to what they already do to differentiate themselves. But it's just a wonderful benefit. So, you know, think of plans where you've got trouble with participation or you don't have your dependents are not participating in the plan. You know, you can layer on one of these telemedicine benefits along with the direct primary care to provide some coverage when people may not otherwise be able to afford the full-blown thing. So it's a great benefit, but it's good for people's health, most importantly. But it's very good, it's forward thinking. so we've been trying to get that done for at least 10 years. So I was really happy to see that in there.

And then... There are a couple of things about the individual market. Can I talk about that for a moment?

AB: Sure, I had a quick question about, you we were talking about the HSAs and I know you and I were talking before this call about the HSAs, the bronze level plans, the catastrophic plans and the changes there and why they only offer those in the individual market. You want to talk more there?

JT: Yeah, sure. So let's start there and then I'll just mention quickly a couple of other things that have to do with the individual market. A lot of people saw that provision and they kind of looked at it in the same category as the direct primary care and telemedicine because basically what it says is we're going to change that definition of what is a qualified plan. Because catastrophic and bronze may not automatically fall into that category. They might have some sort of care that's available before the deductible, even though they're kind of slimmed down in their benefits otherwise. But why they did that, it wasn't some sort of policy decision. This administration is very interested in expanding that definition of a qualified high deductible health plan and modernizing it. However, when you're looking, when you're working on a budget bill, remember this One Big Beautiful Bill was a budget bill, you have to stay within the budget parameters and there are priorities. Do you want to do this more or do you want to do this more? So every time someone makes
an HSA more available, that is some lost federal revenue to the government, whether it's for somebody's good health or not. And so they had to fit it in the budget bill. So the only reason why it's only in the individual market and only in the marketplace inside the individual market is strictly a budgetary issue. I'm sure that they will continue to work on this and we will see this pop up again in other places.

So that it will be eventually expanded into off-exchange plans as well as the group market, particularly the small group market. But it was just a budgetary decision. So a lot of people want to be all up in arms. Well, why did they not do it for this or that? They want to do it, though broadly, but they were not able to do it in this particular go-around, and more to come on that.

AB: It's good to reset the perspective too, because I think it's easy to forget when policy and budget get mixed. Also politics is just a really hard space to be in right now as well. But it's easy to start pointing fingers and getting upset when you look at something from different angles. Remembering that it originally came out of a budget bill can really help put it back into perspective. The reasons for this bill, the benefits, you know, the pros and cons, there's always going to be downsides, right? There's never something we can launch that is perfect for everybody. But it's really nice that you put it back into that perspective for us.

JT: Yeah, and I will say it's not a partisan issue, because both Democrats and Republicans both want some changes to what that definition of a qualified plan is for different reasons. So the Democrats in general want it because they want people to be able to access things like primary care more quickly and things like that. And Republicans want to expand it so that more people can have HSA accounts and plan for their medical expenses that way. It's just a philosophical thing. But they both, what they actually want is the same thing, but for a completely different reason. The other thing I just want to point out about the individual market is, you know, they did not expand the enhanced tax credits in the individual market, because this will have a group market trickle down effect.

That doesn't mean that those premium tax credits will go away in January, because they expire the end of this year, the enhanced ones. It just means that the enhanced definition, which allowed more people to be eligible for the premium tax credits in the individual market, that will go away. And it'll convert back to its original definition of what it was. Does that make sense? But you will see some people drop off. I thought I would just mention about who the most likely candidates are. Because they're likely to flow back to their group plan if they have that available to them or to a spouse's plan. And because they, particularly if they're older, I'm going to say 50 and up, the individual market is expensive for them because of the age rating.

So they're likely to be candidates to be trickling back during Open Enrollment to their employer-sponsored plans. So you could expect some uptick there. And then there was also some tightening up on Medicaid. And so some of those people could trickle back to the employer plans or they could just be, the other thing they could do is they could be waivers, but not a valid waiver, which could interfere with a participation count. Whereas before, if they had Medicaid, that was a valid waiver, they could waive off of coverage. There are so few things, there will be some people trickling back in. It is, even though these are individual market provisions where they're tightening up here and there, it doesn't mean that it won't have effect on the group market because everything is, you know, all connected and people, the reality is people flow back and forth from one market to another for the most part. But there will be a lot more tightening up about people qualifying for coverage in the individual market.

And some people for whom documentation was asked for in the past but never followed up on will absolutely be flowing back into the group plan so employers should should think about this so there'll be people that are a little older or there'll be people on probably the lower end of the income scale. Not low low, but they could even be kind of just people with a lot of dependence so that their family income could be lower so just those are there may be some trickle back. That's my point in mentioning that here.

AB: Definitely. And I think that's a good thing for benefits brokers to know that that is a potential of more of those coming into the group coverage, which depending on what type of coverage they are recommending their group, they might want to think about enough of those different implications based on the income level, the age and the health of those people trickling back in. This is great. Thank you so much, Janet, for sharing your wisdom with us and helping us better understand the One Big Beautiful Bill and some of those impacts and changes for the group benefits market. Because this is definitely going to go into effect here. I mean, we're just a couple months out of enrollment season. So the more we know to get prepared for it, the better agents can navigate through this busy season. Thank you so much.

JT: Thanks. Well, happy to share and would love to come back sometime.

AB: We'd love to have you. Thanks so much.

Posted on Friday, August 29, 2025 in Inside the Industry