Covered California SHOP Agent Strategy
The Covered California health insurance marketplace knows from prior experience (HIPC, PacAdvantage) the critical role agents will play in the success of the SHOP Exchange. Agents are an important part of other successful small group exchanges in New York and Connecticut as well. In fact, the majority of all small group sales in California are sold through agents. Because of the wide agreement regarding the need for agent policies to be largely consistent with the small group marketplace, the SHOP agent strategy focuses on how to administer SHOP agent compensation payments, rather than if they should be used.
Options for Agent Compensation
- Set market-competitive commissions with the Health Plans issuing payment to agents;
- Set market-competitive commissions with the Exchange issuing payment to agents;
- Exchange sets rates and issues payment for agents.
Cover California has decided to set market-competitive commission rates and pay the agents directly - option 2. The Exchange will develop curriculum and training that are specific to agents. Agents will be receive specific training on eligibility for subsidies and Exchange coverage including Medi-Cal before being permitted to enroll consumers in QHPs. Once training requirements are met, agents will be certified by the Exchange. Certification will be renewed annualy.
Options for General Agents
- SHOP excludes General Agents from distribution;
- SHOP contracts with some General Agents through a bid process (2-4 General Agents);
- SHOP contracts with all qualified General Agents
The SHOP Exchange has decided to contract with 2-4 General Agents through a bid process. Bidder criteria will be developed based on a series of factors like broad reach of agents (statewide or regionally); how they partner with the Exchange; General Agent override costs and technology, tools and value adds.