Jennifer Lovett, president and CEO of Crystal Financial Insurance Services in Hartford, Conn., has enrolled almost a thousand consumers on her state-run exchange, AccessHealthCT. As she and her other two producers are starting to receive commissions from their hard work throughout the last several months, she realized the exchanges policy of requiring brokers to sell all carriers in order to be affiliated with the exchange is going to be costly for her small agency.
It is required for brokers in Connecticut to be appointed with all carriers in the exchange, she explained in an email recently to EBA. They are charging us appointment fees per broker and an additional fee if you have an agency.
There are three carriers on the states exchange: Anthem, the newly created CO-OP called HealthyCT and ConnectiCare (a non-profit insurer not affiliated with Medicaid or Medicare). All three charge appointment fees per broker, meaning a charge in order to sell the carriers products, and an additional fee for the agency as a whole. Anthems is $100, HealthyCTs is $150 and, most alarmingly to Lovett, ConnectiCares is $305 with an additional renewal every other year of $200 per broker and agency.
It's gouging, Lovett says. This will affect every broker that was forced to get appointed with ConnectiCare in order to sell through the exchange.
It becomes expensive
In some states, broker appointment fees are not charged by carriers. In fact, ConnectiCares own website notes that before Jan. 1, 2011 it took care of those same appointment fees. ConnectiCare will no longer pay the appointment and renewal fees on behalf of our producers, the site says about the switch three years ago. This change will bring us in line with other carriers, which is increasingly important in todays competitive marketplace.
ConnectiCare did not respond to a request for comment on their fee amount by press time. Chris Mele, broker marketing and sales manager for Connecticuts exchange, says its just the way the carriers work the process locally.
It becomes expensive when you have to do it for say six, seven brokers and then on top of that they have separate appointments for the agency too, he says. It can get pretty expensive just to get people started and appointed with them. Some of these carriers want to make sure, with the fees, that brokers are serious about their product.
In California, also a state-run exchange location, brokers also are required to be appointed with all carriers on Covered California, according to spokeswoman Sarah Sol. The most populous U.S. states exchange boasts 11 carriers to Connecticuts three. Sol says some of those insurers charge appointment fees and others may not.
Kaiser Permanente one of the states largest insurers does not charge appointment fees, according to their website. Anthem does not have an appointment fee listed on its website either. Sam Smith, who serves as president of the California Association of Health Underwriters and is president of Genesis Financial in the Los Angeles area, says he isnt aware of any fees that are a hassle to brokers.
In Kentucky, one of the more successful state-run exchange states by execution standards, broker Charlie Stoddard says there are no appointment fees that hes had to pay to the carriers to enroll people on the exchange. Just time and effort for training and certification, that cost plenty, says the producer at Schwartz Insurance Group in Louisville, Ky.
Washingtons state-run exchange does have a few carriers that charge fees, according to Al Pierce, president of the Washington Association of Health Underwriters and a managing partner at OConnell-Pierce Benefits, LLC in Spokane, Wash. A couple of carriers charge a one-time filing fee of $20 or $25, but the majority of carriers don't charge anything, he says.
Have something to give them
Back in Connecticut, Lovett says she tried to call ConnectiCare to discuss the charge but was told only to communicate with their representative via email and if she didnt pay for herself, her brokers and her agency soon, she wouldnt receive commissions for all of her enrollments with the carrier.
She says commissions per enrollment in the state are $16 for the broker. Time spent with each applicant for the initial sale is one hour to three hours, then countless hours after service for carrier errors, bills not sent, ID cards not sent or incorrect names on the cards, etc., she says.
Lovett has previously talked to EBA about her excitement for helping people on the exchanges. To me, this was a slam dunk and its just such a good feeling when you can have people come in here [with pre-existing conditions or no insurance] and have something I can give them, she said in February.
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