Numerous studies have shown that choosing the right health insurance coverage is a daunting task for many consumers, especially those who have never had coverage. Consumers need advice from informed health insurance agents who can help them understand the various health insurance options, evaluate the benefits, enroll in a plan and file a claim. Advisors also provide personalized advice to their clients throughout the life of their policies.
This is why the National Association of Insurance and Financial Advisors strongly opposes recent decisions to reduce or eliminate commission payments to advisors on health insurance policies sold in the individual market. Decisions to cease commission payments on individual market policies sold after a certain date are ostensibly made to manage the costs of administering some health plans. These decisions are ill-advised, short-sighted and unfair.
Ultimately, the elimination of commissions will cause great harm to consumers, as it will adversely impact consumer access to professionally licensed and trained financial advisors at a crucial time when selecting and purchasing health insurance coverage is more complex than ever. Consumers will be left without the assistance of an experienced, licensed, trusted, and knowledgeable advisor to help them through the process of selecting and purchasing the right health insurance plan.
A survey of NAIFA members who have sold health plans in the individual market shows some advisors will be forced to discontinue service to their clients if they are not fairly compensated for the hours of work required to assist consumers in choosing the right health insurance plan to fit their needs.
According to the survey, 93 percent said health insurance companies have reduced or eliminated their commissions. While the loss in commissions varied from as little as $500 to as much as $100,000, at least 40 percent of those surveyed said the loss has prompted them to take action and stop soliciting their services to consumers, while nearly 20 percent said they have yet to make any change. At least 38 percent said they are likely to stop soliciting their services or charge fees in the future. The reduced or elimination of commissions also will affect how they serve existing clients in the individual health market, with 50 percent saying they are likely to drop their clients all together, or charge a fee.
How is NAIFA confronting this issue?” At the state level, some of the NAIFA state associations are pursuing changes in state law that would ensure that advisors are compensated for providing their valuable services to their clients. And at the federal level, NAIFA-National is working to advance legislation that would remove agent commissions from the medical loss ratio provision in the Affordable Care Act.
The foundation of his work philosophy is reflected in the following:
“My company is dedicated to providing prompt service and assistance in the areas of employee benefit design, consultation, implementation, related business insurance needs and estate planning for business owners and key executives.”
Hyatt is a graduate of Carroll College in Helena, Mt., earning a Bachelor’s Degree in general business. Hyatt and his wife, Belen, have four children. His activities in the insurance industry include having served as President for both the local and state Insurance and Financial Advisors Association. He is a past board member of the National Association of Health Insurance Advisors, and currently chairs a national committee for the Insurance and Financial Advisors Association. Currently, Hyatt is the Chairman of the Board of the Idaho Small Employer Reinsurance and Individual High Risk Reinsurance Pool for the State of Idaho. He also serves as a board member of the Idaho Exchange “Your Health Idaho” These activities, coupled with Hyatt’s commitment to serving his clientele in the ever-changing benefits arena, have made him an invaluable resource.
Through a consummate desire to provide exemplary service and a reputation for integrity, Hyatt has been recognized by his peers with the receipt of The Presidents Achievement Award, The Glennon Award, The Rankin Award and Isern Award.
Hyatt would welcome the opportunity to work with your organization.
Latest posts by Hyatt Erstad (see all)
- Elimination of Commission Payments in Health Markets - April 22, 2016
- As ACA Co-Ops Go Under, Advisors Are Left in the Lurch - January 21, 2016
- Employee Benefits Change or Not? - October 26, 2015