California and insurers in the state owe thousands of dollars in commissions to insurance agents who have helped individuals and families enroll in health coverage during Covered California’s open enrollment periods, the CHCF Center for Health Reporting/Sacramento Bee reports.
The center is supported by a grant from the California HealthCare Foundation, which publishes California Healthline (Hellesen, CHCF Center for Health Reporting/Sacramento Bee, 4/11).
Background
More than 12,600 insurance agents are certified to sell health plans through Covered California (California Healthline, 12/1/14).
Agents assisted 43% of individuals and families who signed up for coverage during the second open enrollment period, according to the CHCF Center for Health Reporting/Sacramento Bee.
While commission amounts vary, agents typically earn:
-1% to 4% of the first annual premium and a smaller percentage for each renewal for private coverage through the exchange;
-About 6.5% of the first annual premium for enrollees in the Small Business Health Options Program, or SHOP; and
-A one-time $58 fee for Medi-Cal enrollments.
Medi-Cal is California’s Medicaid program (CHCF Center for Health Reporting/Sacramento Bee, 4/11).
The exchange pays commissions to agents who help enroll small employers and residents eligible for Medi-Cal, but insurers pay commissions to agents who help individuals enroll in private coverage through the exchange.
In December 2014, Covered California Executive Director Peter Lee told the exchange’s board that the state was months late in paying commissions to agents for assisting small businesses (California Healthline, 12/1/14).
Details of Issues
According to the CHCF Center for Health Reporting/Sacramento Bee, many of the unpaid commissions are from SHOP, and some date back more than a year.
Amounts vary, but some agents say they are owed as much as $20,000 or more.
Patrick Burns, president of the California Association of Health Underwriters, said the unpaid commissions might cause some agents to stop assisting enrollment in the state exchange.
He said, “It’s very difficult for agents to continue to help consumers if they’re not going to get paid for the work that they’re doing.”
Covered California Response
According to the CHCF Center for Health Reporting/Sacramento Bee, Covered California has said it is aware of the issues and is working to fix them.
Exchange spokesperson James Scullary said, “Covered California takes very seriously this delay in payments as well as assuring that the payments are accurate.”
He added that SHOP payments likely will be distributed by the end of April, noting that the delay has been due to a “more manual” than expected reporting and validating process for payments.
Anthony Cava — a spokesperson for the California Department of Health Care Services, which oversees Medi-Cal — said that by the end of April, the exchange will have made payments for 170,974 applications submitted through December 2014 (CHCF Center for Health Reporting/Sacramento Bee, 4/11).