NAIFA eyes tax reform, retirement issues in 2025

Key provisions from the Tax Cuts and Jobs Act of 2017 are set to expire Dec. 31, and the National Association of Insurance and Financial Advisors is making renewal of those provisions one of its top legislative priorities this year.

Kevin Mayeux, NAIFA CEO, told InsuranceNewsNet that the association wants Congress to extend the provisions that impact individual taxpayers while keeping the tax-preferred treatment of life insurance and related financial products.

“It's important that many of those provisions, if not all of them, get extended, hopefully permanently,” he said. “But we also want to make sure that we continue to ensure that the products and services our members offer – whether they are protection products or investment products - are given the right tax treatment to encourage more Americans to make sure that they've got the right protection in place, can plan for their financial futures, and can do it in a way where they're incentivized to do so, as opposed to being penalized.”

NAIFA looking at tax issues

One provision of the TCJA – the Section 199A deduction – is another part of the tax law that Mayeux said NAIFA wants to see Congress extend. As part of the TCJA, Congress added a new deduction for pass-through businesses under Internal Revenue Code Section 199A and made slight cuts in individual income tax rates. Unlike corporate profits, pass-through business profits are taxed only once, at the owner level.

Mayeux said extending the Section 199A deduction would benefit many NAIFA members who are small-business owners. “We want to make sure our members can continue to make a decent living so they can take care of their clients properly,” he said.

House Republicans also are considering new limits on corporate state and local tax (C-SALT) deductions as an offset option for a broader reconciliation bill extending the TCJA tax cuts. Mayeux said placing new limits in effect runs the risk of raising premiums on insurance and annuity products, something NAIFA opposes.

“That makes it more difficult to convince people to put those right policies and products in place so that they can have a firm and secure financial future. What we need to do as a country is eliminate roadblocks and difficulties and better encourage individuals to save and be prepared,” he said. “So capping C-SALT deductions would be incredibly detrimental to the industry and to the American consumer in the long run, because of what it's going to do to premium costs.”

NAIFA also plans to work with the Centers for Medicare and Medicaid Services to bring stability to the Medicare market, preserve agent commissions, and crack down on “bad actors” who are misleading consumers about Medicare Advantage, Mayeux said.

“We want to enhance, or at least preserve, the role of a trusted advisor to help people put together their health plans for the year, as well as help protect the consumer against bad actors,” he said.

Working with 50 state legislatures

In addition to being an advocate for the industry in Washington, NAIFA’s state associations work with legislative bodies in all 50 states. The association also works with the National Association of Insurance Commissioners and the National Conference of Insurance Legislators “to help make sure that draft regulations and draft statutory provisions come out where the role of the trusted advisor is prominent and that we’re looking after consumers’ best interests,” Mayeux said.

He said some state-level issues impacting NAIFA members include whether states will mandate or implement long-term care insurance programs and whether states will impose fiduciary standards on financial and retirement advice.

NAIFA members are concerned about government-imposed regulations that hinder their ability to provide advice, Mayeux said.

“At the end of the day, while everyone wants to make a living, they also are concerned about making sure their clients have access to the right protection products and can put together a proper financial plan so that they and their families can live a good life,” he said.

“We want to protect commissions, reduce regulations and remove or reduce barriers for agents and advisors to give the right advice to their clients – and then hopefully that will result in people being better prepared financially.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].