Gap-Filler Distributor Pays More Commissions

In the past, short-term health insurance coverage issuers could provide coverage and continuation coverage with total terms lasting up to almost a year in most states.

Under President Barack Obama, the Centers for Medicare & Medicaid Services completed work on final regulations that require an issuer to limit the duration of short-term health insurance it provides for a consumer to three months. The regulations took effect April 1.

The company has tried to prepare for that change by adding more hospital indemnity insurance products, which are not affected by the new three-month duration limit, company executives said during a conference call with securities analysts.

The company continues to benefit from a key feature of the ACA individual major medical risk control system.

Insurers now try to persuade consumers to pay premiums while they are healthy, and not to wait to pay for coverage until they get sick, by letting consumers buy coverage only during a limited open enrollment period. At other times of the year, consumers must show they qualify for a special enrollment period before they can buy major medical coverage.

Because the products Health Insurance Innovations distributes are not major medical coverage, they are not affected by the open enrollment period system. That means the company can sell its products year-round.

— Read Short-Term Health Distributor Gets New Chairman, New CEO on ThinkAdvisor.