February 23, 2016

Mike Adelberg: Health Insurers Docking Broker Commissions During Special-Enrollment Periods ‘A Hard Issue'

A number of health insurers are suspending or lowering commissions for brokers who sell health policies through the federal exchange during special-enrollment periods (SEPs). According to Inside Health Insurance Exchanges, insurers complain that SEPs “have increased volatility in an already unstable risk pool,” making it difficult to stabilize their exchange margins. However, altering broker commissions could also violate an Affordable Care Act (ACA) provision that requires commissions for insurance sold outside of the federal exchange to match those for similar policies sold on the exchange. Some advocates have also pushed the Centers for Medicare and Medicaid Services (CMS) to formally prohibit docking commissions during SEPs.

Mike Adelberg, senior director for FaegreBD Consulting, told Inside Health that both arguments have merit.

“This is a hard issue because we want to see marketplace enrollment increase, and we want to see vulnerable people get coverage,” Adelberg said. “But insurers have the right to set commission levels and, as long as they’re not violating federal and state law, it is hard to argue with insurers lowering commissions if they’re losing money.”

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