We have, unfortunately, been preparing for this day since the inception of the
Patient Protection and Affordable Care Act (PPACA).
As many of you may already know, the PPACA has had a dramatic financial impact on our industry, our clients, and our insurance carrier partners:
- CNN Money - United Health Care to Exit Most Exchanges
- Bloomberg - Aetna PPACA Reversal
- MPR News - Blue Cross Delivers Major Blow to Health Care Reform in Minnesota
- Crains Detroit - Priority Health/HAP to withdraw PPO Plans from Health Insurance Marketplace
In addition to this news, virtually all of our carrier partners have sited even higher losses resulting from "Special Election Period" (SEP) enrollments throughout the calendar year. A Special Election Period enrollment is defined as one that is executed outside of the Open Enrollment (OE) period, resulting from a qualifying event (i.e.
marriage, divorce, loss of coverage from an employer, birth of a child, moving from one state to another, etc). For SEP enrollments, our carriers have measured and communicated a loss ratio of 40% higher than enrollments executed through Open Enrollment (OE).
As a result of the economics surrounding the individual health insurance market, our major carrier partners (Priority Health, HAP, and BCBSM/BCN) have eliminated all commissions payable to health insurance agents during SEP.
Why is this important for you to know?
As long as we have been helping our valued clients with individual and family health insurance, our commissions have been included in the monthly premium payments. It is important to note that regardless of whether you use a licensed agent or not, your monthly premium payment would be the exact same so the cost to you, the consumer, has always been
! We (the licensed agent community) have had our commissions reduced by over 70% since the PPACA has taken effect which means we are now doing a substantially higher amount of work for a substantially lower amount of money. Despite this fact, we have continued to work tirelessly on behalf of our valued clients in addition to finding way to operate our business more efficiently.
Unfortunately, for clients who require our services outside of Open Enrollment, we will no longer be compensated by our carrier partners and are now forced to institute a "fee for service" model to continue our work.
Who does this impact?
To be very clear, if you have secured a policy through us during the 2017 Open Enrollment period -
apply to you.
We have received compensation for your policy by our carrier partners and will continue to provide the same great service we always have.
That being said, many of you have been gracious enough to refer your friends/family members/colleagues to us for assistance with their health insurance needs - we cannot begin to thank you enough for the confidence you have in our services! For
future clients that need to enroll in a plan during the 2017 Special Election Period (SEP), we will be forced to charge a modest upfront fee for our services before we can begin our work.
What is the fee and how will it work?
The fees required during the 2017 Special Election Period will work as follows:
- Fee to get a policy put into effect only - $250 one time
- Fee to get a policy put into effect and 12 month service contract - $400 one time
- Fee for stand alone 12 month service contract - $250 one time
- We will have a "PayPal" link on the homepage of our company website to facilitate payment in a simple and efficient manner
To further clarify, we will discount the 12 month service contract by $100 if it is purchased in conjunction with the policy. Otherwise, if you choose to forego the 12 month service contract at the time we secure the policy and you need our assistance at a later date we will require you purchase a 12 month service contract at that time for the higher rate of $250.
What about President Trump? He's gonna fix this right?
Despite the executive and legislative actions executed over the past few weeks, there is still quite a bit of uncertainty on what the GOP will do to reform the PPACA. We are certain that they are moving forward with repealing the law, but they have not detailed what they will replace it with. It is our opinion that even if they do come to an agreement on how to replace the PPACA, the changes will likely be phased in over a period of years - as a result, the issue of payment for our services during SEP will likely stay in effect for the remainder of 2017.
In closing, it is truly painful to be placed in this position. We have always promoted and championed client access to licensed, professional, ethical, and knowledgeable advisors at absolutely no cost. We will continue to fight through our legislative channels, both locally here in MI and at the Federal level, to rectify this issue so that we may continue our work at no cost. Please stay tuned as there will be some substantial changes to the PPACA in the coming year.