The agency that will manage the Vermont Patient Protection and Affordable Care Act (PPACA) exchange program is seeking public comments on a broker compensation proposal.
The state’s Vermont Health Connect exchange system is suggesting that health insurance brokers who help exchange users should be able to collect $15 per enrolled individual or small-group employee per month in 2014.
The broker compensation fee would be the same whether an individual was buying self-only coverage, coverage for both the individual and a spouse, or coverage for the individual, a spouse and children.
In 2014, the first $5 of the monthly broker fee could be paid using federal funds.
In 2015, the broker compensation fee would fall to $10 per enrollee per month.
Comments are due June 11.
Vermont is set to require insurers to sell all new individual and small-group business through Vermont Health Connect starting Jan. 1, 2014.
The state also is preparing to ban the practice of bundling producer compensation into individual and small-group commissions.
PPACA is supposed to create a body of independent ombudsmen, or salaried “navigators,” to help consumers and employers use the exchange system, but the U.S. Department of Health and Human Services (HHS) has ruled that agents and brokers who receive compensation from health insurers cannot be exchange navigators.
In May 2012, Vermont exchange managers commissioned a survey of 50 Vermont small businesses that offer health benefits.
About 78 percent of the business owners said they would do without broker services if the cost of the services amounted to 4 percent of the premiums, and 57 percent said they would do without broker services if the cost of the services amounted to 2 percent of the premiums, exchange officials said.
But the exchange staff met with brokers and found that, if broker fees are too low, brokers will refuse to help people use the exchange, officials said.
Exchange users also would have to pay a separate benefit plan administration fee, officials said.
Vermont Health Connect is using a bidding proposal to hire an administer to provide qualified health plan (QHP) administration services for all exchange QHP users.