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Colorado exchange plans, brokers may dance with all

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Colorado Health Benefit Exchange planners are trying to create a world in which the exchange, insurers and producers all waltz together on the same level dance floor.

The exchange planners are hoping that many health insurance agents and brokers will become exchange-certified producers, any exchange carrier that uses brokers will sell through just about all exchange-certified brokers, and exchange-certified brokers will sell products from all broker-using exchange carriers.

Exchange staff members and finance committee members have talked about that vision in a broker relationship update, a broker commission document and a broker appointment memo.

Jim Sugden, the manager of the state’s Small Business Health Option Program (SHOP) small business exchange arm, said the exchange will not require individuals or small businesses to use producers but definitely will work with producers. 

The board has adopted a policy of “minimizing ‘steerage’ and encouraging certified brokers and licensed customer service staff to present health plan options to prospective clients in the most unbiased way possible,” Sugden wrote in the appointment memo.

The board wants producers to consider offering both individual and SHOP coverage, and for as many exchange brokers to work with as many exchange carriers as possible, to ensure that prospective exchange clients have access to the broadest possible array of plan options, Sugden said.

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“Where necessary, [the exchange] will work with brokers and carriers [to] mediate carrier actions to deny or terminate a certified producer’s appointment, Sugden said.

If a carrier wants to reject a request for appointment from an exchange-certified broker, the exchange will try to get the carrier to work with the exchange to find an appropriate alternative, such as a probationary period, to rejecting the appointment, Sugden said.

“Broker and agent compensation should be comparable both inside and outside the exchange,” Sugden said.

The Colorado exchange planners want exchange carriers to start out paying commissions directly to the exchange-certified brokers, rather than paying the commissions through the exchange, according to the broker relationship update.

Later,” the exchange technology will be able to manage broker commissions should a future decision be made to compensate brokers through the exchange,” according to the broker commission memo.

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