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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Can the Exchange Really Compensate Agents Equally?

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Question: Will agent compensation in the Exchange truly match agent compensation outside the exchange? I am thinking of tiered compensation arrangements based on volume that are common in today's market.

Answer: Most of the details of the agent compensation picture is still in the TBD category, but the Exchange needs to insure that they have a level playing field in terms of agent compensation to protect against adverse selection. The requirement that agent compensation be the same in and out of the Exchange should extend to all forms of compensation - monetary as well as non-monetary incentives or considerations. Similarly, the principle should be applied to all bonuses, overrides, and like programs that reward high-volume agents and brokers. Such programs must calculate eligibility for bonuses equally, without regard to whether the enrolled lives are in Exchange or non-Exchange products.

The Exchange should also prohibit, by contract, participating issuers from paying product-specific bonuses in or out of the exchange. Such bonuses, if targeted for example only at non-exchange offerings, could thwart the goal of requiring that commissions be equal in and out of the Exchange.

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