NEC Opposes Proposed Insurance Rule
On September 11, 2023, The New England Council’s Financial Services Committee submitted a comment letter in response to a notice of proposed rulemaking (NPR) from the Departments of Health and Human Services, Labor, and Treasury that would have an impact on our insurance industry members that provide short-term, limited-duration insurance (STLDI).
Of the three proposals included in the NPR, the Committee is specifically concerned with the proposal from the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) which would change the tax treatment of certain benefit payments in fixed amounts received under employer-provided accident and health plans.
The Committee believes that if this proposal moves forward, it will significantly restrict cost-effective financial protection insurance options that have been available to individual consumers for decades and continue to be popular today. Additionally, we believe that this proposal would drastically change current tax law and would subject policyholders to new taxes on the benefits received under the impacted policies.