Health Agents for America (HAFA) says a state-level health insurance agent compensation bill in Georgia is a bad deal for agents and brokers who sell health insurance.
The bill, Georgia House Bill 64, would require a health insurer that builds agent commissions into its official rate filings to pay agent commissions consistent with the levels included in the filings.
The bill would, however, let an insurer eliminate agent commissions for individual major medical coverage sold during a special enrollment period (SEP).
(Related: HAFA Urges Agents to Keep Fighting)
Supporters argue that the bill would help agents and brokers, by requiring insurers to live up to their agent compensation commitments, and by discouraging insurers from fibbing about commissions to persuade regulators to let them increase rates more. Supporters say the bill would make producers better off in most cases.
HAFA likes the idea of a health insurer paying agents as much as it told state insurance regulators it would pay.
HAFA opposes the idea of a state officially blessing an insurer’s move to eliminate agent pay for individual major medical insurance sold during a special enrollment period.
“We are concerned,” HAFA says in a statement it emailed to members and supporters. “Georgia would be the first state in the nation to pass a bill legislating and making it lawful for the insurance companies to withhold compensation.”
It’s not clear whether any other state or federal body has ever passed a law that explicitly lets companies withhold compensation owed to people in any other profession, HAFA says.
“We believe the people of Georgia deserve the option to use an independent agent, and should they choose to use an agent/broker, [the agent/broker] should be paid a fair wage,” HAFA says.
The Special Enrollment Period System
Drafters of the Affordable Care Act eliminated most of the strategies health insurers once used to reduce claim costs, such as medical underwriting and limits on coverage for pre-existing conditions.
Regulators, insurers and managers of ACA public exchange programs tried to give insurers some help with managing claim costs by establishing an annual “open enrollment period” system.
An open enrollment period limits when people can buy health coverage.
Consumers can now buy individual major medical coverage during an open enrollment period, from Nov. 1 through Dec. 15 each year, without giving any reason for buying coverage.