Broker commissions eliminated for special enrollment

Carriers take action against abuse in spite of CMS pledge to more carefully vet applications

Feb 04, 2016 | By Jack Craver

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.

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.

Feds clarify PPACA special enrollment guidelines to prevent misuse of insurance signups.

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.

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