Health Insurance Brokers Now Paid by EFT from Blue Shield

by John Hansen

In an Effort to Improve Efficiency, Blue Shield of California Requires Agents to Be Paid by Electronic Funds Transfer

June 2016, Blue Shield of California is mandating that all health insurance brokers selling their plans sign up to receive their commissions by Electronic Funds Transfer (EFT). This will help lower operating costs for this California health plan that is fighting hard to compete with Anthem Blue Cross and Kaiser Permanente.

Administrative Costs Must Not Exceed 20%

Due to the implementation of Obamacare in California, Medical Loss Ratios (MLR) have to be at 80%. This means that the expenses for health plan administration, marketing and health insurance broker commissions cannot exceed 20%.

Blue Shield Cuts a Lot of Paper Checks to Brokers

Blue Shield has many agents that get monthly commission checks, often of $20 or less per month. Now, the health plan will no longer be sending paper checks. Requiring EFT deposits for all their health insurance brokers will improve their efficiency and save them quite a bit of money in the administration department.

Improving Efficiency Is the Only Way to Compete

Quality of care, efficiency and affordability have been some of the key goals of the Obama Care program. California health plans are looking for any way they can find to cut costs in order to compete with California’s leading HMO, Kaiser Permanente. Health plans have already lowered commissions for health insurance brokers. Paying agents by EFT  is one more effort by Blue Shield of California to stay competitive.


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