For 2017, Anthem Blue Cross cuts agent commissions, again, and continues to ignore agent delegation through Covered California.
For the second time since the launch of Obamacare and Covered California, Anthem Blue Cross has cut the commissions they will pay agents for assisting consumers with enrollment into individual and family plans. Anthem Blue Cross now has one of the lowest commission structures for agents helping individuals and families apply for health insurance in California. This commission cut, coupled with rules limiting Covered California delegated agents from receiving commissions, has resulted in agents thinking twice before assisting consumers with Anthem Blue Cross health plans.
Low commission rates discourage agents from assisting consumers
When Covered California was launch for 2014 enrollments, Anthem Blue Cross decided to move away from a commission structure based on a percentage of the total subscriber monthly premium. They instituted a flat monthly compensation fee of $18 per member per month (pmpm), with renewals at a lower level. In 2016 they announced they would reduce the initial first year compensation down to $16 pmpm and $12 pmpm for renewals. For 2017, Anthem Blue Cross continues to obliterate agent commissions dropping them to $12 pmpm for new enrollments and $9 pmpm on subsequent renewals of those members.
Anthem Blue Cross will cut agent compensation in 2017 from $16 to $12 for new enrollments and reduce the renewal rates from $12 to $9 per person per month.
Lowest Anthem Blue Cross Agent Commission Structure
From my estimates, only Kaiser Permanente has a lower compensation structure when averaged over a twelve month period. The lower renewal compensation completely ignores the fact that agents provide as much service during the year and researching renewal options for clients. Agents tend to the Covered California household changes to family size, income, and address updates. When it comes time for renewal, consumers ask agents to research whether their providers are still in-network with Anthem Blue Cross health plans, which change every year.
Agents prevented from representing consumers
In addition, Anthem Blue Cross maintains an Agent of Record policy that discourages agents from even assisting consumers who may seek their guidance. Under the Agent of Record policy, if a consumer enrolled with an agent previously, but decides to change agents (designate a new Agent of Record at Anthem Blue Cross) the old agent is still paid the commission. The consumer must get the old agent to sign a release form and file paperwork with Anthem Blue Cross designating the new agent. I had one client whose previous agent had retired and Anthem Blue Cross was still paying commissions to an inactive agent!
Anthem Blue Cross AOR Designation for New Membership
Off exchange individual health benefit plans – For any new business with an Original Effective Date of 1/1/14 or after, Anthem will only recognize as the AOR the agent whose name is designated as the enrolling agent on the last enrollment form that is submitted. Under the Agent Agreement and this Guideline, an enrollment will only be considered to be new membership if there has been no prior coverage through Anthem, or if any prior coverage through Anthem has lapsed for a period of three (3) months or greater.
The only exception to the above is where an individual who was previously covered as a dependent on an existing individual health benefit plan is assisted by an agent in obtaining a new individual health benefit plan as an independent subscriber. In such circumstance that assisting agent will be recognized as the AOR of the new individual health benefit plan.
On Exchange individual health benefit plans – For new membership with an Original Effective Date of 1/1/14 or after, enrolled on a plan sold through Covered California, Anthem shall recognize as the AOR the agent identified as the AOR in the enrollment information received from Covered California. If no AOR is designated in the enrollment information received from Covered California, Anthem shall have no obligation to recognize any claimed existing agent-client relationship. Under the Agent Agreement and this Guideline, an enrollment will only be considered to be new membership if there has been no prior coverage through Anthem, or if any prior coverage through Anthem has lapsed for a period of three (3) months or greater.
Anthem Blue Cross ignores Covered California Agent Delegation
The Anthem Agent of Record policy also completely ignores the Covered California Agent Delegation. If I enroll a family through Covered California, who had a policy with Anthem Blue Cross, the original writing agent still gets the commission, even if that agent is not certified to enroll consumers in a Covered California health plan. But the Anthem Blue Cross policies to deny agent commissions gets worse. If an individual or family enrolls through Covered California, or direct with Anthem, they are considered a house account. Even if the consumer later designates a Certified Agent through their Covered California account, the agent will NEVER be paid a commission.
Agents working for free to help consumers
In essence, when a consumer is designated as an Anthem Blue Cross house account, the agent assisting with the Covered California application is working for free. Since Covered California moved to charging the health plans a commission for each enrollment in FY 2016-2017, 4% of the total premium, Covered California earns more from Anthem Blue Cross for most enrollments than agents assisting the consumer.
Agents have signed a contract with Covered California that they will fairly represent all health plans on the exchange. But it is really difficult to represent Anthem Blue Cross when they continue to cut their commissions and there is fair chance of not even being eligible to receive a commission based on Anthem’s restrictive Agent of Record policy.
No agent representation with Anthem Blue Cross
The Agent of Record is important not only for agents to be paid, but for assisting clients with problems they may have at Anthem Blue Cross. Only the Agent of Record can contact Anthem Blue Cross on the consumer’s behalf to inquiry about premium billing issues or health care services claims. When consumers delegate an agent through Covered California, there is the implicit understanding that the agent will also be able to provide the additional service of calling Anthem Blue Cross to correct issues that might arise with the member’s account.
For my part, I will live up to my Covered California agent agreement. I will dutifully enroll any consumer and their family into an Anthem Blue Cross health plan. But if it is apparent that I will not be recognized as the Agent of Record, I will have to inform the consumer that my assistance stops with Covered California. I see myself as a consumer advocate. When a health plan like Anthem Blue Cross works to sabotage my role as a consumer advocate and designs a system to deny me compensation, it is only reasonable that I honestly offer other health plans to my clients.
Will Anthem squeezing agents result in lower enrollments?
I hope Anthem Blue Cross is not surprised if they see a decline of agent assisted enrollments into their individual and family health plans. But perhaps that is their goal, to rid themselves of paying agent commissions. While Covered California has advocated and instituted regulations to make sure agents are treated fairly by all the health plans, Anthem’s design to slowly starve agents may be beyond their control.