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Life Health > Health Insurance says some agent comp programs discriminate

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The Centers for Medicare & Medicaid Services may be sneaking in a little support for agents and brokers who want help with getting exchange plan issuers to pay them for exchange plan sales.

Health Agents for America, a Baton Rouge, Louisiana-based agent group, has been fighting for two years to try to get the Centers for Medicare & Medicaid Services (CMS) to do something about shrinking public exchange plan issuer agent compensation.

Related: Agents angry about unpaid ACA exchange plan commissions

CMS officials have said that a state-based Affordable Care Act exchange can do what it wants about agent and broker compensation. has required issuers to offer the same compensation for sales of on-exchange plans and similar off-exchange plans. CMS officials have told issuers and producers to talk amongst themselves to resolve other producer comp questions.

Last week, however, as the Obama administration was getting ready to turn over to the Trump administration, CMS officials got involved with another producer comp issue: concerns that issuers might be using producer compensation arrangements to avoid enrolling people with significant health problems.

The Affordable Care Act blocks insurers from using “marketing practices or benefit designs” to scare off sick people.

CMS officials say in a new batch of informal advice that they believe payment of producer commissions is a “marketing practice” for purposes of applying the ACA ban on discriminating against sick people.

If, for example, an insurer pays a higher commission to agents who enroll applicants for bare-bones bronze-level coverage than for rich platinum-level coverage, because purchasers of bare-bones coverage tend to be healthier, “this constitutes a failure on the part of the issuer to comply with the applicable federal guaranteed availability provisions and [exchange plan] marketing standards,” officials say.

CMS officials say in the new guidance that some issuers may have already baked discriminatory producer compensation arrangements into their 2017 rates that cannot be changed.

To avoid disrupting 2017 coverage, CMS will put off enforcing the new interpretation, officials say.

Officials say they will start enforcing compliance for plans with coverage periods that start on or after Jan. 1, 2018.

The Trump administration will be in charge of administering the provision. Administration officials and Republicans in Congress have said that they want to repeal the ACA, but they have not talked at length about what they want to do with the ACA exchange system.

B. Ronnell Nolan, the president of Health Agents for America, said in a comment on the new interpretation that her organization has always believed that managers had the ability to talk to exchange plan issuers about commissions.

“However, with the insurance carriers leaving the market, it wasn’t the right time to address the issue,” Nolan said. “Better late than never.”

The new interpretation “does go into effect until 2018, but someone is listening,” Nolan said. “We will take it and now will continue to work with the new administration for the survival of the agent community.”


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