CAHU 2016 Objectives to Protect the Interests of California Health Agents

by John Hansen

At the Summit 2016, CAHU President, Michael Lujan stated the objectives of the California Association of Health Underwriters. The top objective is to support the interests of California health agents. And the #1 goal related to this objective is to make the argument for fair compensation for brokers. Lujan shared 4 key goals of CAHU at the convention:

1. Agents are to be paid.

Many are shocked that this would even be in question. However, since the implementation of the Affordable Care Act (ACA), some California health plans have said they would not pay agent commissions at all.

2. California health plans should honor the broker of record.

There should be no grandfathered contracts. If a California health agent enrolls a client, that agent should get credit for and be paid commissions on that health insurance contract. This may have only been an issue for Anthem Blue Cross of California.

Anthem was keeping old records of agent enrollments. If another broker signed someone up who had previously had a different insurance agent, even though that previous agent had nothing to do with this health plan contract, Anthem was still giving credit for the enrollment to the previous California health agent.

Discussions are taking place with Covered California and the Department of Insurance to remedy this. However, it is believed that Anthem is still doing this at the present time. If insured is delinquent, the California health agent of record should be notified.

If a California consumer is late on paying his/her health plan premium, the consumer is notified. However, CAHU argues that the California insurance agent of record should also be notified. That way the agent can follow up with the client and assist that person in paying his/her bill.

3. Remove ability for CA health plans to not pay or to decrease commissions for SEP enrollment.

Some carriers have said they will only pay California health agents for applications received during Open Enrollment, and not for those received during the Special Enrollment Period (SEP). Or, insurance companies have threatened to pay lower commissions on enrollments during SEP. CAHU along with the California Department of Insurance, Covered California, and the Department for Managed Health Care have all expressed concern regarding this.

Research has shown that there is greater risk enrollments coming in during SEP, at which time the Exchange receives 20% of the Obamacare California enrollments. Also, we have seen that outside of Open Enrollment, when people sign up with a health plan, they use their health care more. During the first three months, there is a 40% increase in usage for SEP enrollments.

So it is not surprising that California health plans want to pay less for these high risk enrollments. However, this is not the fault of the insurance agents. California health agents do just as much, and often more work, on enrollments that are after the California Open Enrollment Period.

4. Remove the ability for health plans to pay lower commissions based on plan type.

Lower cost high deductible plans like the Obamacare California bronze plans have lower premiums. Health plans tend to make less money on these plans. Thus, some health plans (like Health Net) have said they will pay lower commissions to California health brokers for these plans.

According to Michael Lujan, in 2017 all of these issues will be remedied by law. This was good news for California health insurance agents. These results give agents greater motivation to financially support the work of CAHU and its Political Action Committee (PAC).

Also, this good news insures agents that they have friends in Sacramento, at the Department of Insurance and at Covered California. California health agents are very aware that leaders at the capital are concerned about how the ACA and health care issues affect consumers and small businesses. It’s reassuring that more and more these leaders are beginning to see that California insurance agents play an important role in supporting consumers and small businesses.