When the Affordable Care Act sets in next year, insurance health brokers will no longer be able to take commissions as was the usual norm. Insurance companies compensated agents by paying them commissions for the amount of insurance they sold.
This practice will stop with the shopping of insurance on the Vermont Health Connect - which is the new health exchange. The Exchange will be the only place from January 2014 for residents of Vermont to buy insurance for individuals, small businesses with less than 50 employees. The agents will join the exchange and advice customers instead of earning commissions. They will earn a fee paid by the government. The amount is still under debate. "What we're trying to do is find the sweet spot in the small employer and individual market," said Mary Eversole, director of the Vermont Insurance Agents Association.
AdvertisementMark Larson, commissioner of the Department of Vermont Health Access, proposed a $15 per employee or individual monthly charge in 2014. That fee would then drop to $10 in 2015. He said the department arrived on that number after working with a focus group of 50 businesses. Eversole said her association recommends a $22 flat monthly fee. "We know we're taking a huge cut in compensation, and we're prepared to do that," she said. "But we still need to be able to cover our costs." Larson said that he is willing to consider the association's proposal, but he said that setting a fee is "a balancing act."
"Small employers have told us very clearly that if the price is too high they won't use a broker, and if the price is too low brokers won't sign up to be certified to use the exchange," he said. "So we're trying to find something that maximizes the participation of brokers but doesn't make it so high that employers don't avail themselves." Along with agents there will be call centers people can call for help. There will be navigators - who can meet people personally and guide them through the different insurance options.
"Navigators can help enroll people in the physical transaction and determine eligibility, but unlike agents, they cannot advise them on plan selection," said Eversole. Larson said that brokers would serve a vital role in the exchange, especially in the first year.
"We know a lot of employers have relied heavily on their brokers in the past, and we're interested in continuing that relationship, particularly for this year, where there's a lot of transition going on," he said. Mike Fisher, chairman of the House Health Care Committee said that agents for health insurance were not meant to be barred; rather they were needed to provide customers with information and guidance "Good brokers and good businesses will continue to contract with each other but with the transparency of knowing how much the services cost and how many the businesses have to pay," he said.
If the state shifts to a single payer, publicly financed health care system, however, Larson said the need for brokers would be alleviated.
Hannah Punitha (IRDA Licence Number: 2710062)
Andrew Stein, June 2013
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