10. Jen LaTour: Don't Sleep On PPACA Compliance Requirements

All right. Welcome back to the Broker's Voice. I am joined by the one, the only, head of business development at MZQ Consulting, Jennifer Latour. Jen, welcome aboard. Hi. How are you doing?

Happy New Year. I'm well.

You too. You too. I bet you it's a lot warmer where you are in Orlando than where I am. It.

Well, it's cold for us today. You see, I have my sweater on. It's. It's in the low 60s. You know, we're suffering.

Just, Just horrible. I woke up this morning to negative four, so, you know, just horrible.

Anyways, talk about the weather this time of year.

We're not here to talk about the weather. We're here to talk about insurance.

Yes. Compliance.

All right. So before we get there, though, I ask a question. I ask everybody. Okay. Most of us didn't get in this health insurance industry by design. How did Jen Latour find herself in this wonderful industry?

No, Jen Latour was actually a public defender when she first got out of law school because she was going to say save the world from every. From itself. And did that for a few years. And my husband was a federal agent and we moved around a lot, so I was not going to take the bar every single place we went. I'm ambitious, not that ambitious. And so I was able to use my legal background in compliance departments, landed at a brokerage in Atlanta and 2005, aging myself and still stayed in the industry ever since.

So I gotta. You and I have. Have known each other for a while, but I've never asked this question. So knowing you were a public defendant, your husband was a federal agent. If I thought I was a marked man, you were a couple. I wanted to know.

We. Yes, yes, absolutely. Absolutely. I mean, you wanted to stay away from him, but you wanted to call me if things went bad.

Well, here you are in this beautiful industry now.

Yeah.

Fast forward. You're not with that agency in Atlanta anymore. You're with mzq.

I am.

Talk to a little bit for. For the people who have lived under a rock for the last five years and who don't know who MZQ Consulting is by now. Tell us a little bit about MZQ Consulting.

Yeah. So we started off as an ACA reporting company in 2014 when everybody was not sure whether the payroll companies were even going to be able to do this. In 2016, when the ACA was in question because of the change in the administration. Our CEO, Jen Berman, which I'm sure everybody's watching this, knows and myself kind of were you know, talking like, okay, what are our superpowers? What else can we do? And well, compliance, you know, she's an ERISA attorney by trade. I had been, you know, in ERISA for many years at this point. So what else can we do? So we have still have the ACA side of the House, which is great, going crazy right now. And we also do benefits compliance. So things like these fun and QTL analyses, non discrimination testing, all the stuff that makes people's eyes glaze over, but that we really like to do.

This is why I wanted you on to talk about this topic of, of compliance, because could, you know, what are we seven years in?

Yeah, almost six years in for sure.

And I feel like many brokers are still kind of head in the sand when it comes to what is compliance. So let's start maybe here. Six years in. Yeah, a lot of people might be just kind of pushing it off. It is what it is. My clients have never been fined before.

What are some things brokers still need to realize or know today? Even six years in?

Yeah, well, that the ACA reporting requirement is still really actually a thing. It never did get overturned. What confuses people a lot is that the individual mandate, the penalties pretty much went to $0, which made it individuals don't technically need to have health and coverage or I should say they won't get fined for not having it. The employer mandate, which was what we all care about as brokers and people in our industry, is still alive and well. And for 2021, there is no longer a good faith effort. So the last few years the IRS said, okay, as long as you try your best and you get these forms to us, even if they're incorrect, you know, you're fine. Good faith effort this year and going forward, there is no such thing anymore. So they are actually really checking all of the coding on lines 14 through 16 on the 1095 C, and they're really penalizing people. We have seen letters as recent as 2018. I haven't seen any 2019 letters yet. Penalty letters from the IRS. But that doesn't mean they're not coming. They're just behind a few years. And the typical penalty we see for a small group is about $150,000, although for large groups we've seen 32 million. That's the biggest one I've seen.

So let's, let's put some perspective on this. I think what you just said is very relevant. And if brokers are listening, I hope they took that seriously in the past. Maybe They've. The, the IRS has said, okay, we'll forgive you this time, but the forgiveness is kind of over.

Absolutely.

Especially six years in. Right. It's like, okay, if you're not doing it now, you're just blatantly ignoring it at this point.

Exactly. And if you're not doing it correctly, you're just blatantly not working with somebody who can help you get it.

Exactly. So. And this is why. So you said, okay, on a small group side, I think about compliance, like disability insurance. I think a lot of people don't get it because they're like, it's never going to happen to me. Right, right. And I think a lot of brokers are going, I, I know there's fines out there. I know there's the potential for fines, but you know what? None of my clients have had them before. So we're just going to keep the blinders on the $150,000 fine. What? How? Give me the scope of the size of that group. How many employees?

Less than 150.

So if you're a broker with a 90 life group and you fail to do this and the IRS comes knocking, we could be talking about a fine that's the tune of six figures.

Absolutely. The smallest fine I've seen is about 60,000. But they. That's not, on average, whether it is.

A 60,000 fine or a $32 million fine.

Yeah.

Who is that employer going to turn to when they get that notice in the mail?

Their broker.

Who is that employer probably going to blame?

Their broker.

And so this is why, for the brokers listening in, you have to take this stuff seriously. Now, let's get into what, the shift, then. Okay, cool. Now, I know I need to do this. We also see a lot of brokers who just think they need to check the box and get it done on the cheap. What are some things when. Now. Now that you got brokers going, okay, we've got to get this done. Where do we turn? What are some things they need to look out for?

Absolutely. You know, just like anything in life, cheaper is not always better. More expensive isn't always better. But you really need to partner with somebody who understands all of the intricacies. Right. Because, I mean. Yes. Have the codes been the same for each year going forward? The one year where they had Covid furloughs in there and you had a code for that, it's pretty much been the same. But I still get questions, you know, for people. Well, you know, they're in their eligibility period and what's their safe harbor. I don't understand. What does it mean to waive? It doesn't say wave, you know, in the codes. It doesn't say that. Oh, well, use this. If an employee waves it, you know, lists the safe harbor codes and just simple things like making a mistake on the 1094 and checking off that a group did not offer minimum essential coverage all year automatically triggers a penalty. So just making silly mistakes. Now are the vendors who are do it yourselves or just kind of like giving little hand holding, you know, again, are you going to want to put your clients hands, you know, in, in the hands of somebody who's not going to care, not going to ask the questions, ask the probing questions, listening for. Okay, well you told me, you know, that you had one entity. Now we were talking, now you're telling me you have two. But you don't think that's a control group? Why not? You know, you need to have somebody who really is, is catching the conversations, really listening and really digging in to get the full story of what the organization is comprised of. Because that happens a lot. We see that.

Well, and yet you've got the. There's a big difference, right? I know you're a little biased, but there's a big difference between oh, we do compliance reporting for you as well versus that's all we do.

Absolutely, absolutely. And yes, I am biased. You know, and I always say I would put my, my ACA team or my compliance specialists up against everybody because they are trained in compliance. This is what they do all year long. This is not something they just think about one time of year. You know, our.

Account managers, compliance specialists, they're not reading off of scripts, right? They are able to get in deep from the first conversation all the way until the last. Again, absolutely biased. But this is, you know, not something. We're not a payroll company and oh, we do compliance or we're not this and oh, we do compliance. This is literally what the 25 people in my office breathe, eat, do all year long.

Well, and here's why it's important, Jen. I laugh because the broker world, as brokers, you compete for business and get frustrated when an employer goes with the cheapest option, right? Oh, that broker is only going to charge X. Are they going to take less commission? You're like, but we bring so much more value. We know we're not the cheapest, but look at all the things we can bring you. But then on the flip side, when they make decisions for their own clients, they buy the same way the Prospects buy that, frustrate them.

Absolutely.

And my point is great. You may have saved a few hundred dollars, but if that ultimately leads to the reporting not being done right, which could still end up with a five, maybe six figure fine, what did you accomplish?

Right. And you know, completely on point. And for that, you know, we get, when that happens, we get, well, Jen, can you fix it? Maybe. And I say that because we can, you know, do the reasonable cost to the irs. We can do all of these things, but depending on the agent you get, they don't have to like our reason.

Yeah. Well, and talk about this. I want, I want to like, shift the perspective for a second because I had a client who, when we, when we engaged with them a few years back, their number one pain point was compliance. Because every single year it was left to the human resource director, AKA office manager, AKA CEO, to do the reporting herself. And I still remember sitting in her office and having her say to me, andy, if I've got to do this one more year, I quit. Yep. And so talk maybe to the broker community about that perspective of what's happening on their client side. When this reporting is left to the.

Client, they are totally overwhelmed because again, this time of year, right, W2S needs to come out. Maybe 401k audits are starting. They have a lot on their plate already. And this is something that they do one time of year. They're not going to remember what they did last year. They're tired, they're over it. They're just completely probably like cursing all of us in the world. Right. Like, why is this a thing?

And it's not setting it up for.

A good year. Right. If you're already aggravated now because you have to do your ACA reporting and you know, by the end of this month, you have to get your employee forms to them. You know, now you have somebody who's looking, well, why isn't anybody helping me? That's what. When people come directly to us, not through our brokers, it's because they're looking for help. Nobody has helped them. Nobody has told them about this. Where are you?

Well, and I want, again, I want people to hear what you just said. MZQ has employers coming to them directly because their brokers aren't talking about it. The last thing I want is to know my client went directly to a resource because I failed to have that conversation with them.

Absolutely happens.

Some of these advisors are great advisors and they're the ones getting frustrated because the team they work with at that employer, at that client, it says they don't have the time and the bandwidth to put in all these strategies that they want to deploy. It's because they've got to do this stuff.

Absolutely. I mean again, if you figure just for us, you know, we need final data in, in the next few weeks, you know, you come from the break and now you're hitting this running, you know. So of course they want to talk about, let's say you're a 41 plan year. You're not thinking about what you want to strategize for the next plan year because you're trying to get this done.

Yeah, yeah. Well, let's quickly shift because I know you don't have a ton of time today, but.

That compliance, that kind of reporting has been around for six years. But we've got some stuff that is more recent. Mental health parody. Talk to us. What is mental health parody and why is it so important?

It's really important for so many reasons, but especially because now the DOL has said it's important. Right. And that's always what it. Right. I mean it's like, okay, now they're really focused on it. So this has been around for a few years now. The idea and, and really the law that you have to have your medical and surgical benefits on parody with your mental and substance abuse benefits. Mental health, substance abuse benefits. Last year, the, a few days ago last year President Trump came out with the CAA Consolidated Appropriations act and had a ton of things, but one of the things was that as of February of 2021, you should also funded groups should have this NQTL, this non quantitative treatment limitation analysis completed. So not next month, not two years from now. Last year you should have had it done. So anybody who doesn't have it done is completely behind the eight ball. That's okay, we can still help. But what, what's really important and why this analysis is so in depth is the only way I can explain it that I can wrap my head around sometimes is the DLL wants you to show your work, right. So it's not enough to just send them the plan documents to just say oh yeah, we're in parity. They want to see for every non quantitative treatment limitation and we've identified between 20 to 25 for each employer that we've worked with show your work. So it's not good enough to show two plus two is four. How did you get there? So these, these analyses for us anyway are averaging about 130 pages. And the DOL last year said okay, we're really enforcing this. In the first year we're going to look at about 30 employers all across the spectrum to come in and do audits. We've seen as of today 12 of those. Now there aren't many vendors doing this, so maybe they're only at 12 right now. But they are actively looking, they're actively auditing. They're coming in because of employee complaints. The worst thing that we've seen so far in a DOL audit is and this will hurt everybody's feelings right now they are making the group go back three or four years and re evaluate all the claims.

Like yeah, so okay, yeah, I'm a broker listening this and I, I go.

You just spit your water out. You're just like, yes. You're like, I hate latour. Why she always have to.

Because, because if you're like me and you're that advisor, I know exactly where your head just went. You're thinking about your biggest client, that, that, that provides the most revenue going did we do? Have we done this for them? We're still. Well by the time this airs, Jen, we'll still be well deep in Q1. What can brokers be doing right now to make sure this doesn't happen to their client?

They need to have the analysis done. This is not something where oh, maybe the deal will come in. You know, we've been in this industry, Andy, a long time. You know, are they coming and looking at wrap documents every two seconds? No, this is absolutely. Unit is about insurance. You know, MZQ is, you know, compliance insurance. Like no, for real. Like this is a requirement. They are hitting this hard. This is a primary. I don't want to say objective but the, the administration is very invested in this. So now the DOL is very invested in this. So they're coming looking. So it's not a matter of if, it's a matter of when. And having this document at least ensures that when they come in you at least can say oh no, we've done it. Now we're. People ask me, is this going to be a yearly requirement? And we say yes because the DOL does not want a stale document. So we can do one today, but if you don't come back to me in three years and they come in, are you still doing things the same? You know, this is definitely something that is going to be yearly and something that.

Every self funded group needs to do. Not just over a certain size, every single one.

Well, I like to refer to you guys as happy client Insurance. If you want to go to bed at night knowing your clients are taken care of and there's no gaps covered. Mzq, the compliance piece is one you have to cover. They're happy client insurance if you want to keep your clients happy. So last question, Jen.

Yes.

I'm a broker. I go, crap. I'm not sure if we're doing this or not or I blatantly know we're not doing this. How can somebody reach out to MZQ most efficiently?

Yeah. Come through our website@engagemczq.com that will come right to my email and I will see it or email me directly at Gen 2. So the number two because we have 100 Jennifers at McQ@mcq consulting.com and I can at least educate, give you all of the knowledge as far as compliance wise and hopefully, you know, set you up to help your clients because I know compliance is scary. I know if you don't know it, you don't want to talk about it. But I am here to help you talk about it.

Well, Jen, thank you for jumping on. I know you're busy guys. I hope you took this seriously. I wanted Jen on because the irs, the dol, they're coming. They're going to be finding people and I the last thing I want for you is to have one of your most important clients be left out in the dark because when they get that letter in the mail, guess what? They're not going to go, oh, shucks, our fault. They're going to point the finger at you. So don't be that. Don't be left out in the dark. Don't lose a very, very good client because of a small gap you missed, or I should say huge gap you chose to overlook. So Jen, thank you.

Thank you for everybody else.

You too. For everybody else listening in. Hey, Jen just gave you a lot of clarity around compliance and we know clarity and confidence collide. Action happens. So take that action. Help ensure your clients are meeting their compliance requirements. Take care.

Thank you.