Bad news for brokers.
Kaiser Health News reports that three of the largest insurance companies in the country, upset with people signing up for their individual marketplace plans outside of the designated open enrollment periods, have informed brokers that they will not pay them commissions for post-deadline customers.
Apparently Anthem, Aetna, and Cigna all independently took the same action in recent days, reports Kaiser.
Similarly, Cigna and Humana are no longer paying commissions on more expensive “gold” level plans in the PPACA marketplace, hoping instead to encourage enrollment in cheaper, higher-deductible plans at the “silver” or “bronze” level.
The action comes amidst complaints from insurers that “special enrollment periods” granted to customers for a variety of reasons, such as a job loss or a move, have been abused.
Insurers allege that customers have been using such periods as excuses to sign up when they are sick or planning to use medical services.
The Centers for Medicare and Medicaid Services has conceded that there has been some abuse, and has eliminated a number of special enrollment periods and pledged to more carefully vet applications for special enrollment in the future.
But for insurers, the easier way to deal with the problem may be to just deter special enrollment customers from their plans.
Although they are not allowed to bar them, they can take a crucial incentive away from brokers to push such customers in their direction.
It’s not clear for now how the government will respond to the practice.
By no means are all PPACA plans purchased through brokers, but a big portion have been. A report from the Kaiser Health Foundation found that 44 percent of PPACA plans in Kentucky, which experienced the largest drop in uninsured rate, were bought through brokers.
For now, the largest nonprofit PPACA insurer, Kaiser Permanente, has not changed its commission policies.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
