Covered California hosted a Certified Insurance Agent forum at their Sacramento headquarters to review and highlight the conditions for the Special Enrollment Period (SEP) for California consumers. Titled “The Power of Synergy” – Covered California’s Special Enrollment Period Kick-off Tour, the two hour session was a mix of sales cheerleading, best enrollment practices, and questions from the attendees. There were numerous questions regarding what type of income must be reported to Covered California.
Covered California agent forum answers questions
The event was moderated by Drew Kyler, Interim Deputy Director, Outreach and Sales Division for Covered California. Kyler reviewed the statistics of the 2015 open enrollment, changes to the agent contract, agent support, and a review of SEP qualifying events.
- Covered California will be making changes that would allow individual agents to be associated with a larger agency. Currently, Covered California only recognizes individual agents for enrollment.
- The Covered California Board has approved a new carrier contract to take effect in 2017 greater agent commission equality. (See text of contract below.) Carriers will not be able suspend commissions on SEP enrollments and must pay the same commission on all metal tier enrollments. Some carriers had paid smaller commissions on plans that typically generated higher consumer claims. In addition, carriers will have to honor the Covered California agent delegation in recognizing a consumer’s delegation as the Agent of Record for commissions.
- Covered California will be completely redesigning the agent portal. Enhancements will include the ability of the agent to quickly review their book of business and clients who are conditional eligibility for their APTC and must provide verification documents. Currently agents must access a separate agent portal and download cumbersome spreadsheets of their Covered California client list. (See Keeping track of Covered California clients.)
- Kyler reminded agents that their contract states that they must be fair, accurate and impartial when representing Covered California plans to consumers. Agents can never charge handling, set-up, or consulting fees to assist consumers with their Covered California enrollment.
- Later in the year Covered California will start to audit the qualifying events of consumers who enroll during a Special Enrollment Period. Currently, Covered California has not required any proof that a consumer has a legitimate or verified qualifying event to enroll in health insurance outside of Open Enrollment. Most carriers require proof of a consumer’s qualifying event before they will accept their enrollment for plans off-exchange.
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Open enrollment challenges discussed
A panel discussion that explored that challenges that Certified Insurance Agents and Certified Enrollment Counselors faced during the last open enrollment was led Efrain Cornejo, Public & Private Partnerships, Manager for Covered California. One Certified Insurance Agent on the panel said his agency was looking at offering a deductible indemnity plan for consumers who select the high deductible Bronze plans. Indemnity plans (think Aflac) pay the consumer not the provider when health care services are rendered.
Are deductible indemnity plans right for consumers?
While the concept is good, indemnity plans can have numerous exclusions and limitations in the fine print. It’s easy for consumers to assume that the indemnity plan will pay on a health care service only to find out later it was excluded. However, these indemnity plans pay a great commission to the writing agent. The rational from the insurance agent on the panel was that in the face of shrinking health insurance commissions his agency was looking for another product to generate more revenue from his Covered California clients.
Covered California for Small Business gets on track
Shawn Balsdon, Director of Covered California for Small Business (CCSB) Sales Northern California, gave an overview of small group plans offered through Covered California. Most importantly, he touched on the enormous improvements that have been made for agents and small groups to CCSB. I can attest that the SHOP that was a Flop two years ago has undergone transformative organizational improvements. As Balsdon mentioned, they have been seeing a significant increase in small groups underwritten through CCSB with their improved administration and health plan offerings.
Agents still struggling with estimating consumer income
Kyler came back at the end of the session to host an audience question and answer period. It was painfully apparent that there is still much confusion surrounding the type and reporting of consumer income for Covered California’s Advance Premium Tax Credits. Unfortunately, the topic of Modified Adjusted Gross Income is complicated and agents could only be referred to the numerous job aids that Covered California has produced on the subject. (List of Job Aids at bottom of post.) See: What of income is counted for Covered California
Agents can’t assist with Medi-Cal problems
Another vexing issue for agents is assisting their clients with Medi-Cal issues; especially in mixed households where the children are Medi-Cal and the parents are on a Covered California plan. Essentially, agents would like to be able to represent their clients at the county Medi-Cal office to iron out problems or enrollment. It was acknowledge that Covered California was aware of the assistance gap, but did not have any foreseeable solution to the problem.
The fine line of a qualifying event for SEP
There were also several questions on what constituted a qualifying event for the Special Enrollment Period. One of the biggest misconceptions is that if an individual or family is enrolled in an off-exchange plan and their income drastically drops, making their health insurance premium unaffordable, they qualify for enrollment in a Covered California plan with the tax credits. This is not the case. But this scenario illustrates one of the least discussed features of Covered California enrollment – income to premium protection.
Only Covered California offers income to premium protection
Even if a family does not qualify for a subsidy to reduce their monthly health insurance premiums, but they enrolled in health insurance through Covered California and their income suddenly drops they can report the income change. The new lower income may qualify the individual or family for the tax credits and the ability to select a different health plan. They may also qualify for an Enhanced Silver plan with reduce cost sharing to further reduce their out-of-pocket expenses. This sort of income to premium protection can only be realized if the household enrolls through Covered California.
Covered California can’t view a consumer’s tax return
Consumers receive letters from Covered California stating that their estimated income doesn’t match with their most recent federal tax return. This has led many consumers to assume that Covered California can actually view a taxpayer’s federal return. Covered California can’t see a consumer’s federal tax return unless they send it to them to verify their income.
Estimated income compared with federal HUB
When an application is submitted to Covered California the CalHEERS enrollment system sends the consumer’s estimated Modified Adjusted Gross Income (MAGI) to be checked against the federal HUB. If the MAGI differs more than plus or minus 10% from the most recent tax filing, then the consumer is given conditional eligibility and must submit proof of their income.
MAGI vs. AGI
Of course, the MAGI can be substantially different from a consumer’s Adjusted Gross Income (AGI) reported on their taxes. Just the addition of Social Security retirement benefits, which are generally not taxable income, can push a consumer’s MAGI over 10% of their AGI. The confusion surrounding AGI, MAGI, and comparing the consumer’s income information with the federal HUB is an area that Covered California should consider creating a clearer explanation of for consumers.
Agent store fronts favored by Covered California
Part of the forum showcased how Covered California favors agents with store fronts. However, there are probably more agents that just have a website as their store front as opposed to agents with a brick and mortar facility. There was no discussion on how Sales and Outreach would support “online only” agents, like me. One suggestion would be to make it easier for consumers to find agents on the Covered California website and remind them that we don’t charge for our services. Bonus, consumers aren’t limited to the store hours with online agents and can communicate with the agent at any time through the phone, email, or even text messages.
Where to stalk for SEP consumers
There was also an uncomfortable presentation on where to target for SEP sales. Covered California has assembled maps projecting where consumers, most likely to be eligible for SEP, might visit – such as their local unemployment office. I’m not sure how other agents view the process, but I don’t sell health insurance. I assist consumers with their enrollment into health insurance. We shouldn’t be characterizing a basic human right such as health care as a sale. Consumers should be selecting a health plan based on the in-network doctors, hospitals, and medications covered by the drug formulary.
Agents are paid by the carriers for individual and family plan enrollments
Yes, I do receive compensation for my enrollments from either the carriers for individual and family enrollments or from Covered California for small groups. Those commissions subsidize my time assisting people Medi-Cal eligibility, educating families on valid immigration status, and helping consumers make sense MAGI, 1095-A, B, Cs, and Premium Tax Credit reconciliation. Agents are not selling health insurance. Agents are offering their service to consumers to help them navigate the very complicated procedure of enrolling in health insurance through Covered California.
Overall the agent forum event was informative. I got the feeling it was developed more for the Southern California agent market as opposed to Northern California. What was abundantly clear was that both agents and enrollers have lots of questions. They could have devoted a full two hours to nothing but Q & A and still not covered all the topics raised. Maybe I’ll have to organize one of those events because there is a real hunger for information on the different aspects of enrolling with Covered California.
2017 Carrier Contract – Agent Compensation
Covered California – 2017 -2019 Individual Market QHP Issuer Contract
2.2.6 Agents in the Individual Exchange
a) Compensation. The provisions of this Section apply to Agents who sell Contractor’s QHPs through the Individual Exchange.
b) Compensation Methodology. Contractor must pay a commission to Agents to ensure Contractor is fairly and affirmatively offering all of its products at each metal level during both Open and Special Enrollment Periods. Contractor shall be solely responsible for compensating Agents who sell Contractor’s QHP through the individual market of the Exchange. Contractor shall use a standardized Agent compensation program with levels and terms that shall result in the same aggregate compensation amount to Agents whether products are sold within or outside of the Exchange. Contractor shall provide the Exchange with a description of its standard Agent compensation program, standard Agent contract, and policies on an annual basis.
c) Incentive Compensation Program. In order to enhance consistency in sales efforts for products offered inside and outside of the Exchange, Contractor shall add the Agent’s sale of Contractor’s QHPs through the Exchange to the Agent’s sale of Contractor’s individual policies outside the Exchange to determine Agent’s aggregate sales that are used by Contractor to determine incentive or other compensation payable by Contractor to Agent, to the extent such aggregation is necessary to determine Agent compensation under Contractor’s applicable Agent agreement or compensation program. Contractor shall not change the Agent commission structure or rates during the Plan Year. Contractor must pay the same commission during the Open and Special Enrollment Periods for each Plan Year. Contractor shall not vary Agent commission levels by metal tier. Contractor shall approve and pay Agent commissions on all new Agent-of-record and change of Agent-of-record delegations as outlined in contract sections 2.2.6 (f) and 2.2.6 (g). Contractor shall provide information as may reasonably be required by the Exchange from time to time to monitor Contractor’s compliance with the requirements set forth in this Section. Contractor’s standard Agent compensation and incentive compensation programs entered into or in effect prior to January 1, 2014 shall not be subject to the requirements of this Section.
d) Agent Appointments. Contractor shall maintain a reasonable appointment process for appointing Agents who contract with Contractor to sell Contractor’s QHPs to individuals through the Exchange. Such appointment process shall include: (i) providing or arranging for education programs to assure that Agents are trained to sell Contractor’s QHPs through the Exchange, (ii) providing or arranging for programs that enable Agents to become certified by the Exchange; provided, however, that certification by the Exchange shall not be a required condition for an Agent to sell Contractor’s QHPs outside of the Exchange and
(iii) confirmation of Agent’s compliance with State laws, rules and regulations applicable to Agents, including those relating to confidentiality and conflicts of interest, and such other qualifications as determined in Contractor’s reasonable discretion.
e) Agent Conduct. Contractor shall implement policies and procedures to ensure that only Agents who have been duly certified by the Exchange and maintain that certification may receive compensation for enrolling individuals in the Exchange.
f) Agent of Record. At initial enrollment, individuals may notify the Exchange of an Agent delegation. The Exchange shall send notice of the delegation to the Contractor via a new enrollment file or a weekly reconciliation file. The format of the reconciliation file shall be defined by the Exchange. The Exchange will solicit comments from the QHP Issuers prior to finalizing the format of the reconciliation file. Upon receipt of the notification, contractor shall approve the delegation (unless an Agent is not licensed or not appointed) and has five (5) days to update their system. The Exchange recognizes that Contractor may contract with insurance agencies who employ or contract with Agents. The Exchange further understands that Contractor may delegate the agency, or primary Agent at the agency, instead of the specific Agent who enrolled a consumer. As such, an Agent delegation may consist of an Agent, agency, or primary Agent with an agency. The Contractor shall send an Agent of Records Exception Report by 5PM on the last business day of the month which includes any changes the Exchange requested, but were not made.
g) Change to Agent of Record. Individuals may notify the Exchange of an Agent delegation change. The Exchange shall send notice of the delegation change to the Contractor via a weekly reconciliation file (or an 834 maintenance file). Upon receipt of the notification, Contractor shall approve the delegation (unless an Agent is not licensed or not appointed), and has five (5) days to update their system to reflect this change upon receipt of all required information from the Exchange. Contractor shall notify the existing agent of the delegation change within ten (10) business days. The Contractor shall send an Agent of Record Exception Report by 5PM on the last business day of the month which includes any changes the Exchange requested, but were not made. The Exchange further understands that Contractor may delegate the agency, or primary Agent at the agency, instead of the specific Agent. As such, an Agent delegation may consist of an Agent, agency, or primary Agent with an agency.
h) Carrier Scorecard. The Exchange will administer an annual Agent survey that rates the services Contractor provides to Agents, including those services required in this section 2.2.6. The Exchange will solicit comments from the QHP Issuers to develop the Agent Survey prior to finalization. The Exchange will utilize the results of this survey to identify areas of improvement and work with QHP Issuers to improve performance.
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Covered California Job Aids
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More job aids can be found at http://hbex.coveredca.com/toolkit/