Agent Fees Can Be Charged When Providing Non-Typical Services

by John Hansen

Don Cooper Argues that Often IFP Agents Go Above and Beyond Typical Agent Services

Don Cooper, at the CAHU Capitol Summit 2016, argued that California health plans need to make health agent commissions more reasonable. Also, he argued that brokers may be able to legally charge agent fees.

Above and Beyond What’s Typical = Justification to Charge Broker Fees

The big question regarding charging agent fees, is whether or not the agent was providing services above and beyond the typical role of an agent. Cooper argued, “In the individual market, you have to do lots of stuff that’s not typical.”

This was a bold statement to make while in a panel discussion sitting next to Jon Tomashoff, the Senior Counsel for the California Department of Insurance. Tomashoff wrote or co-wrote much of the insurance code for California, and would predictably be opposed to Cooper’s statement.

Typically Health Agents Do Above and Beyond What’s Typical

Cooper sounded like he was saying that the typical job of a California individual health insurance agent is to provide services that aren’t typical. Such a loose definition of “typical” could result in swinging the door wide open for brokers to charge agent fees all across California.

Cooper argued that charging agent fees was also typical in the United States. “California is the only state I’ve worked in that you can’t charge a fee.” He alluded to other states like Texas, Washington and Georgia that allow insurance agents to charge fees.

However, Jon Tomashoff later warned against health agents charging “sham fees”. He argued that an agent would have to be providing many other services besides the placement of health care in order to justify charging an agent fee.