State says UnitedHealthcare can’t ax broker commissions

The Connecticut Insurance Department has blocked UnitedHealthcare’s plan to stop paying broker commissions for plans sold through the state’s health insurance exchange, but will let them pay a lower rate.

The department prohibited UnitedHealthcare from eliminating the commissions because the company included them in its rate filing – the proposal for its 2016 premiums – last year, spokeswoman Donna Tommelleo said.

“The carrier agreed to pay $10 commission on each plan, a resolution acceptable to the department,” she said.

In the past, agents and brokers received $20 commissions for the policies.

UnitedHealthcare previously announced that it would stop paying commissions for new insurance policies offered through exchanges starting Jan. 1. The company has signaled it is considering pulling out of the public exchanges created as part of the federal health law, and UnitedHealth Group CEO Stephen Hemsley said during a Nov. 19 earnings update that reducing or eliminating commissions in most markets was among “several immediate actions to reduce our exposure in this segment.”

UnitedHealthcare has a relatively small presence on Connecticut’s exchange, covering just 1.6 percent of 2016 customers. The company did not sell plans through the exchange in the first year it operated, 2014, and has since had among the highest prices on the marketplace.

The other three insurers that sell plans through Connecticut’s exchange – Anthem Blue Cross and Blue Shield, ConnectiCare and HealthyCT – have said they had no plans to eliminate commissions this year.

If insurance companies want to eliminate commissions in the future, they will have to do so as part of their rate filings, Tommelleo said.

Asked if the company would seek to eliminate the commissions in the future, a UnitedHealthcare spokeswoman said it was too soon to comment on plans for 2017.

Jim Wadleigh, the CEO of Access Health CT, the state’s exchange, warned at a board meeting last month that companies eliminating commissions for exchange business was a growing national trend that would have a direct impact on customer experience. This year, 40 percent of Access Health’s business came from agents and brokers. If they no longer sell exchange policies, Wadleigh added, Access Health would have to fill that role.

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