The Individual Market
Insurance agents are concerned about recent moves by some health insurance companies to significantly reduce or eliminate commissions paid to their health insurance agents for selling and servicing their policies in the private individual marketplace. The CAHU Executive Board is engaged in finding solutions and we have discussed the viability of fees in this marketplace. We agreed that we need to obtain solid legal guidance in order to respond accurately, lawfully, and within the constraints of antitrust to the requests from our members on this critically important issue.
The CAHU Board approved coordinating with the National Association of Insurance and Financial Advisors—California (NAIFA-California), and IIABCal (Independent Insurance Agent and Brokers of California) and those organizations agreed with us in approaching a legal firm in beginning in November, 2016, but in late January that firm decided not to pursue the project. I am happy to report that we have selected a highly recommended firm who will do the in-depth research and provide us with this much needed guidance document. The arrangements to implement this have begun and the report should be available by May.
The attorney will give us a legal outline of the current ability, if any, of insurance producers to charge fees in connection with the sales and service of health insurance policies governed by the California Department of Managed Care, the California Department of Insurance, and whatever other State and Federal laws might affect this area. Additionally, this white paper will show where future legal, political, or lawful marketplace advocacy is needed to change current legal and statutory limitations on existing fee practices.
Efforts on the national level are a little less clear at this time. NAHU is supporting the elimination of the Medical Loss Ratio either by legislation or by regulation. NAHU’s white paper on health care reform includes the importance of consumer access to, and fair compensation of, agents for all the work they perform. Given the uncertainty in Washington about health care reform, it is impossible to predict the impact on agent’s commissions at this time.
Capital Conference
NAHU held its Capitol Conference in Washington, D.C. in mid-February. I have been attending these meetings for more than 15 years and what impressed me was the number of attendees, over 800, more than a 50% increase over the normal turnout. Having a conversation with your Congressional representative is one of the most effective ways of participating in our democracy and getting our message through to those who make the decisions that will affect us and our clients for the future. Also impressive was the effort made by our Washington legislative staff to prepare us for discussions with legislators on the most important aspects of health care reform. For example, the talking points in the informational kits that provide the basis of our presentations were based upon the political party of each legislator. The differences were subtle, but this new approach was effective in creating a dialogue with legislators.
The presentations by experts reflected the uncertainty revolving around House Republican programs as none had gained enough support to move forward. Since the conference, the Republicans have proposed the American HealthCare Act (AHCA) which is in the process of moving through the legislative process. This legislation will continue to evolve, but a tax on the employer-sponsored health insurance, which was a key discussion point during the conference, was not included in the bill. The CAHU Executive Board will continue to provide timely updates and thoughts about the Federal efforts.
Thank you for your membership.
Questions/Comments? comments@cahu.org
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P.S. Don’t forget to submit your application for the NAHU Leading Producers Round Table. This is an excellent way to stand out from the crowd, distinguish yourself as an industry leader, and gain access to the benefits & discounts only LPRT qualifiers receive. Deadline: 3/31/17!
