Big news! On June 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued new documentation clarifying how under-65 insurers should pay agents for Special Enrollment Period (SEP) sales.
According to the new FAQ document, Affordable Care Act (ACA) commissions must be treated the same regardless of when consumers enroll in marketplace coverage.
Ritter is excited to announce this because it means that you could earn the same ACA commissions all year, regardless of when your clients enroll in coverage! Here’s what we have learned so far about this ruling from CMS.
How ACA Commissions Were Earned Prior
If you sell ACA insurance, you may be aware that some individual health insurance issuers have been paying reduced commissions to agents and brokers assisting clients with marketplace enrollment during an SEP. Some ACA carriers have also eliminated agent commissions for SEP sales.
Previously, CMS stated in a December 2016 FAQ document that the payment of agent and broker commissions is a marketing practice under the ACA and that structuring commissions in a way that discourages agents and brokers from marketing to and enrolling customers who have major health concerns is a discriminatory practice. The new CMS ruling on SEP commissions is consistent with this FAQ and encourages health insurers to avoid these discriminatory practices.
CMS Rules SEP and OEP Commissions Cannot Be Different
Aware of the ongoing discriminatory commission practices, CMS issued a new FAQ document to clarify it is not permissible for an insurance issuer to compensate agents or brokers who assist clients in enrolling in marketplace coverage during an SEP differently than an agent or broker enrolling a client in coverage during an OEP.
CMS clarified it is not permissible for an insurance issuer to compensate agents or brokers who assist clients in enrolling in marketplace coverage during an SEP differently than an agent or broker enrolling a client in coverage during an OEP.
According to CMS, the decision to compensate agents or brokers differently based on the time of enrollment violates the guaranteed availability provisions of the ACA. The guaranteed availability provisions state that issuers are required to accept “every employer and individual in the State that applies for such coverage.” This means that insurance issuers must be able to provide insurance to individuals during the OEP, as well as an SEP if an individual qualifies.
There may be exceptions to this rule, but only in cases where state regulators believe the issuer has financial limitations.
What This Means Going Forward
Because commissions varied between the OEP and SEPs, carriers will be expected to update their commission schedules. Commissions will be the same regardless of enrollment period. There is no guidance as to when this change will take place, but we will provide updates as the information becomes available.
This refined regulation means that agents will have the opportunity to earn more ACA commissions throughout the entire year! Regardless of when you enroll clients into ACA plans, you can rest assured you’ll be fairly compensated for your efforts.
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