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Michigan CO-OP describes agent comp payment restrictions

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One of the struggling nonprofit, member-owned Consumer Operated and Oriented Plan (CO-OP) carriers is warning its agents that they will have to go through a special procedure to seek commission payments.

Michigan insurance regulators put the CO-OP, Consumers Mutual Insurance of Michigan, into rehabilitation earlier this month. The CO-OP is on track to shut down at the end of the year.

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Consumers Mutual says in a notice on its website that it cannot take applications for new business or renewal business after Nov. 13, 2015.

If agents earn commissions after that date, in spite of not being able to place applications for new coverage or renewal coverage, Consumers Mutual will make those commission payments through the usual commission payment process, the company says.

But “Consumers Mutual Insurance is currently prohibited under the rehabilitation order from paying commissions earned prior to Nov. 13, 2015,” the company says.

Consumers Mutual plans to give agents a procedure they can use to submit claims for payment of pre-Nov. 13 commissions at a later date, the company says.

See also: Low-cost CO-OPs win share

The carrier’s organizers started it with a $72 million CO-OP startup loan from the U.S. Department of Health and Human Services (HHS). Drafters of the Patient Protection and Affordable Care Act (PPACA) included the CO-OP program provision in an effort to increase the level of competition in the private health insurance market.

The carrier says it will continue to pay health care providers for the covered goods and services they provide for plan enrollees. Earlier this year, the carrier had about 28,000 enrollees.


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