In yet another sign of the erosion of health insurance commissions for agents, Cigna has informed their appointed agents that they will not pay commissions on most of their California health plans in 2016. Cigna has stripped away any agent compensation for their 2016 Silver, Gold, and, Platinum plans sold during open enrollment. In addition, there will be no commissions paid on any health plan that an agent helps a client enroll into during a Special Enrollment Period in 2016.
No Cigna commissions on Silver, Gold or Platinum Plans
The message from Cigna is loud and clear, “Agent’s shouldn’t enroll consumers into Cigna plans, just refer them to the Cigna website.” When a consumer enrolls through the carrier’s website there is no Broker of Record. With no Broker of Record the health insurance company doesn’t have to pay a commission. It’s no different than Covered California health plans telling consumers to go direct to the exchange so they don’t have to pay any commissions.
Only Bronze plans will be compensated
I’m not sure why Cigna is even paying a commission only Bronze plan and not the others unless they are hoping to boost enrollment in that metal tier level. Most people who select Cigna earn too much for the Covered California subsidy and want the wider network of doctors offered by Cigna. In addition, they usually choose a health plan with real benefits such as Silver, Gold, or Platinum. Cigna might be under the mistaken assumption that agents will attempt to down-sell a consumer to actually earn a commission.
Bronze plans are not best fit for every consumer
A real health insurance agent will try to match the consumer with the best available health plan for his or her health condition. An individual that is prescribed a Brand name medications and must visit a physician on a regular basis throughout the year is usually not a good candidate for a Bronze plan. It would be a disservice to the consumer to convince them that a Bronze plan would be suitable when he or she may experience lower out-of-pocket costs for health care expenses with a Silver, Gold or Platinum plan.
Agents should be consumer advocates
A real agent just doesn’t “sell” or “enroll” consumers in health insurance. A real agent is a consumer advocate. The services of an agent shouldn’t stop once the consumer is enrolled in a health plan. Agents are there to support their client with interpreting the drug formulary, help find in-network physicians, explain how the plan works, review the Evidence of Coverage if necessary, add or remove members on the health plan, or call the health plan if there are billing questions to name a few services of an agent. The commission an agent earns through enrolling individuals and families helps them be a concierge for their client’s health insurance.
Agents can’t work for free
But agents can’t be a patient or consumer advocate if they aren’t paid some form of compensation from the health plan. The health insurance companies only look at agents as part of their marketing. They want agents to go pound the pavement, beat the bushes, or dial and smile to enroll individuals in their health plans. Consumers are looking for a trusted advisor to help guide them to the most appropriate health plan and be available should they have questions or problems with the health plan. Agents can neither be a marketing arm for the health plans nor a consumer advocate if no commissions are paid.
Erosion of agent compensation
At the October 2015 Covered California Board meeting there was much discussion about agents not being compensated for Medi-Cal enrollments. (See: Agents enroll 400,000 into Medi-Cal.) Even though I think agents should be paid considering that many of the Medi-Cal health plans are raking in the truck loads of cash from those enrollments, I’m fine with not getting paid to enroll a consumer into the public health insurance option. However, in my comments before the Board, before I learned that Cigna had stripped commissions from most of their California health plans, I noted the continual erosion of the commission structure among several health plans and insurance companies.
Kevin Knauss speaks before Covered California Board meeting on agent commissions
Commissions from all plans helps subsidize agent assistance
Like most agents, my services are not dependent on the commission level of the health plan. A Medi-Cal eligible client gets the same attention and action as a person who wants to enroll in an off-exchange plan that pays a 5% commission. All of the commissions from all of the plans enables me to be blind to the compensation, or lack thereof, of specific health plan a client would like to enroll into. Unfortunately, the equal treatment of all health plans has begun to be threatened by the erosion of agent commissions.
I can’t assist with Cigna Silver, Gold or Platinum plans
It’s with sadness that I must inform any prospective client of a Cigna Silver, Gold or Platinum plan that I can’t really provide them much service beyond simple enrollment. In addition, for the first time as an agent, I will inform prospective clients that they should consider health insurance other than Cigna because Cigna refuses to pay me a commission.