Covered California has terminated 1,403 insurance agents from being able to enroll consumers in health insurance through the California Marketplace as of May 1, 2017. Agent terminations represent a small fraction of the 15,000 insurance agents still certified to enroll consumers. Even though these agents have been terminated, the Department of Insurance still shows many of those agents as appointed with Covered California to transact insurance through the exchange.
Over 1400 Agents Terminated
In response to a Public Records Act Request for the number of Certified Agents and Certified Application Counselors terminated since 2014, Covered California returned of two spread sheets of information. The number of terminations and decertification is through May, 2017. Within the terminations of Certified Insurance Agents the spreadsheet contained the agent name, California Department of Insurance license number, company name, and current certification status. Even though it was requested that the reason for the termination be specified, that information was not included in the data.
There can be many reasons why an agent is terminated or not re-certified to participate in enrolling individual and family consumers into health plans through Covered California. The most common would be a failure to return the yearly updated agent agreement or failure to comply with the voter registration training. Many of these agents, some of whom are located outside of California, may have only been interested in enrolling people in 2014 or they have left the insurance industry altogether.
The California Department of Insurance (DOI) maintains a list of appointments and authorizations attached to each individual license. An insurance agent cannot receive a commission from a carrier such as Blue Cross or Blue Shield unless he or she is appointed to represent the health insurance company. Other agencies or organizations inform DOI if the licensee has been authorized to transact business on their behalf for a range of insurance products the organization may offer to consumers. The individual license details provided by DOI helps consumers determine if the agent they are working with is appointed and authorized to represent specific insurance products. Unfortunately, not all of the appointments or authorizations may be listed. And it is unclear at what point DOI removes appointments. It’s possible that Covered California has notified DOI with respect to a licensee’s authorization, but the information has not been updated.
A review of 50 randomly selected terminated Covered California agents, as of May 12, 2017, showed 36 agent licenses were still authorized to transact insurance through the California exchange when reviewed through a DOI license search. 10 of the agents showed no authorization for Covered California. 3 agents were listed as Inactive and 1 had their licensed revoked. Of the fifty agents, 5 resided outside of California; 4 from Florida and 1 from Arizona.
All of the agent licenses I review were authorized for the California Health Benefits Exchange (aka Covered California) in either 2013 or 2014. I suspect that most of these agents were only around for the initial enrollment period which saw the greatest number of sign-ups when Covered California first became available. I also suspect that many of the terminations are a result of agents deciding that enrolling individuals and families through Covered California was more work than it was worth. Certainly, there are agents today who are still certified, but don’t want to expend the time necessary to enroll consumers in Covered California for the very low commissions agents are being paid. The low compensation is exacerbated when a client, who initially assumed he or she were eligible for Covered California, learns they are only eligible for Medi-Cal. Agents are not paid on Medi-Cal enrollments even though the same amount of effort and time is required to take an individual or family through the enrollment application.
The overwhelming majority of terminated agents were independent, meaning they were not affiliated with an insurance agency, or they did not specify an insurance agency when they were certified with Covered California. Of the insurance agencies that were listed, GoHealth, LLC had the most terminations at 51, followed by Extend Insurance Services with 33, and Health Markets, Inc. and Vimo, Inc with 25.
|Extend Insurance Services||33|
|Health Markets, Inc/Inspere||25|
|Vimo, Inc/ Getinsured.com||25|
|Lighthouse Insurance Group, LLC||18|
|F3 Insurance Services, LLC||16|
|Kelsey National Corporation||12|
|eHealth Insurance Services, Inc||9|
|Freeway Insurance Services, Inc||8|
|Bayside Insurance Associates, Inc||5|
Individual Insurance Agent Termination Sampling
CC indicates California Health Benefits Exchange is still listed as an authorized agency.
|CA DOI License||CC Authorized||City|
The DOI license/appointment search is an inaccurate tool. Many of my health plan appointments are not shown for my license. In order for an agent to fairly represent all the carriers on the Covered California exchange, an agent needs to be appointed with all carries. If the agent is not appointed, there is the possibility that the agent will steer the consumer to a health plan which is not in the consumer’s best interest, but for which the agent earns a commission. Another hole of information is if the agent has been terminated on the carrier side. Health Insurance companies will retract an appointment if they find the agent is engaging in fraud, waste or abuse. This does not necessarily show up in the DOI search and I don’t think Covered California checks to see if their Certified Agents are in good standing with all their carriers.
Covered California Community Partner Decertification
Covered California also provided de-certification information on Certified Enrollment Counselors and Certified Enrollment Entities. However, most of early in-person assister programs were phased in 2016.