Louisiana Insurance Commissioner Jim Donelon told a unit of UnitedHealth Group Inc. Thursday that it must pay sales commissions to agents or brokers when midsize groups renew their health insurance coverage for 2020.
Donelon issued a cease-and-desist order requiring the unit, United HealthCare Services Inc., to pay commissions to the producers associated with group health plan renewals.
Producers had told Health Agents for America (HAFA), a producer group based in Baton Rouge, Louisiana, that they had learned that United HealthCare was telling employers it would leave out producer commissions for renewals of group health plans with more than 50 insureds.
United HealthCare later said the new zero-dollar commission schedule would apply only to group health plans with more than 100 insureds.
UnitedHealth said it would help the affected insureds negotiate and pay an agency fee to the producers, Louisiana department officials said in an announcement of the case-and-desist order.
HAFA asked the Louisiana Department of Insurance to block that move.
Donelon said in the cease-and-desist order that, under Louisiana law, an insurance company or health maintenance organization must pay sales commissions to producers.
A carrier can also pay a producer a service fee and an expense-reimbursement fee, and the insured can pay a producer a “reasonable agency fee, Donelon said.
When a carrier zeroes out commissions that “violates both its obligation to remunerate producers for selling its products and the statutory requirement to maintain one or more schedules of payable commission,” according to the order.