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Washington state chooses "nonaffiliated" model

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Managers of the Washington Health Benefit Exchange will be part of the movement to have insurers pay commissions directly to brokers.

Washington state exchange officials talk about their strategy for working with brokers in meeting notes and other documents posted on the exchange website.

Exchange officials said they expect agents and brokers to handle small businesses and many uninsured individuals.

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires states or the U.S. Department of Health and Human Services (HHS) to have an exchange, or health insurance supermarket, up and running in each state and the District of Columbia by Oct. 1.

The exchange “navigators” — the independent ombudsmen required by PPACA — will handle broad public education and awareness efforts, application and enrollment support for people need one-on-one help, and populations that experience barriers to health insurance access, officials said.

In Washington state, navigators will help only with exchange products, and they will be able to help with exchange plans only during the open-enrollment period.

Agents and brokers will be able to offer products both inside and outside the exchange, and they apparently will be able to sell coverage during special enrollment periods, or periods when individuals can buy coverage as a result of life events such as marriages or divorces.

Officials described their decision about agent-broker compensation as a matter of deciding between a general agency model and a non-affiliated model.

If the exchange board had picked a general agency model, the exchange would have obtained an insurance producer license, obtained appointments from all issuers selling coverage through the exchange, and affiliated all producers who wanted to sell the exchange plans. 

Issuers could have sold all exchange plans without being appointed by the issuers.

In the non-affiliated model that the board ended up adopting, exchange plan issuers will appoint producers to sell the plans.

Producers can sell the exchange plans only if they have appointments with the issuers of those plans.

Producers will get their compensation directly from the issuers, officials said.

A navigator will get a grant-based contract, with half of the payment based on the amount of work done and half based on success at enrolling consumers in exchange plans.

A typical navigator might $360,000, or about $180,000 for general outreach activities and $180,000, or about $40 per head, for actually enrolling consumers in the target population, officials said.

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