Licensed New York state agents and brokers can help clients with COBRA services free of charge, but they must charge for helping clients review and buy independent wellness programs.
The New York State Insurance Department Office of General Counsel presents that conclusion in OGC Op. No. 09-04-05, an opinion issued April 13 and posted to the Web earlier this week.
One question considered concerns whether a licensed producer must charge for providing services associated with the Consolidated Omnibus Reconciliation Act health benefits continuation program.
“An insurance agent or broker may provide a free service not specified in the insurance policy or contract to an insured or potential insured without violating the anti-rebating and inducement provisions of [New York] Insurance Law Section 4224(c) if … the service directly relates to the sale or servicing of the policy or contract or provides general information about insurance or risk reduction; and … the insurer or insurance producer provides the service in a fair and nondiscriminatory manner to like insureds or potential insureds,” officials write in the opinion.
The submitter of the question about COBRA services charges asked whether producers must charge fees for tasks such as sending a former employee a COBRA eligibility packet; enrolling the former employee in COBRA; billing the former employee; collecting the insurance premiums; and forwarding the premiums to the insurer.
Producers can provide those sorts of services at no additional charge, if the services are offered along with providing health coverage, “because the services directly relate to the sale or servicing of the accident and health insurance policy,” officials write.
“However, an insurance agent or broker must provide these COBRA services in a fair and nondiscriminatory manner to like insureds or potential insureds,” officials write.
A producer must charge for reviewing, evaluating and recommending stand-alone wellness programs, because that service “does not directly relate to the sale or servicing of the insurance policy or contract, or provide general information about insurance or risk reduction,” officials write.