In what continues to be an uphill battle for health insurance brokers, Assurant Health is reportedly eliminating broker commissions on individual major medical policies in seven states.
Assurant Health announced they are reducing individual major medical commissions in Florida, Georgia, Indiana, Michigan, Nevada, Pennsylvania, and Texas to 0% for new business. The change goes into effect for all new business submitted on or after January 19, 2015, with an effective date on or after March 1, 2015.
An Ongoing Struggle for Health Insurance Brokers
For health insurance brokers who sell Assurant individual policies, the change in commission policy is hard-hitting.
But sadly, it may not come as a surprise.
Since health reform passed in 2010, brokers have been struggling with reduced commissions and reduced support from the carriers - and many have struggled to find their role with the new Health Insurance Marketplaces.
For example, the change to the Medical Loss Ratio (MLR) in 2011 slashed health insurance broker commissions by $300 Million in 2012 alone. As a result, most brokers started working longer hours for a smaller paycheck.
Additionally, the commissions brokers receive for policies sold on the Health Insurance Marketplaces have been inconsistent, and many brokers have reported not getting commission payments in a timely manner, if at all.
But at the same time, health insurance brokers are the number one resource for helping consumers find the right health insurance. Brokers act as a translator, help their clients understand coverage options, and are considered to be the most helpful resource when selecting a health plan.
So, where does that leave us? As one major health insurance carrier says “goodbye” to brokers, will other health insurance companies follow suit?
While it may be too early to tell what the future holds, Assurant’s reported policy change indicates the role of brokers - at least in the mind of the health insurance companies - is changing.
Do the health insurance companies think they still need brokers to sell individual health insurance policies? In the case of Assurant, I’d say no.
Do consumers think they still need brokers to assist them with shopping for and selecting the right health insurance plan? From my experience, I’d say yes.
What do you think about Assurant’s reported commission policy change? Do you think other insurance companies will follow suit? Leave a comment and join the discussion.