MLR Rebates

[somarco]

Lunch with a carrier rep today. We talked about O-care, SCOTUS, etc and . . . MLR rebates.

Seems at least one carrier (not hers and she would not say who) is going to charge back MLR rebates against agent commissions.

I can't believe a carrier would go to that trouble and expense but I guess that is why they have the big bucks.

 

[Crabcake Johnny]

Sorry, but I don't think so. My commissions are paid per a contractual agreement. Those agreements were changed to reflect a lower commission in response to the MLR.

If any carrier tries to charge me back commissions due to the MLR, I'll fight it in court....gladly. Hopefully it would be under the small claims court limit - then it's in and out.

Unless they can point to a contractual provision that states my commissions are subject to chargeback if a rebate is due, they'll have a lot of fun with a judge.

 

[somarco]

Except the commissions are a percent of premium (in most cases) and the rebate is technically a refund of premium . . .

 

[Crabcake Johnny]

Sorry - I personally don't think it would stand up in court...but we'd find out...tell your carrier rep that. At best, I'd certainly give them all the media attention they could handle so future agents would be aware that they really have no clue what their commissions will be. It's a sh*t way to conduct business.

 

[somarco]

Your complaint is with HHS, not the carrier. If you want to sue over a few hundred in charge backs have at it.

 

[Crabcake Johnny]

If they actually implement that and start charging their agents back, then who in their right mind would give them another piece of business. The agent would have no clue as to what they'd actually make.

Horrible move. It certainly wouldn't done "quietly." I'd make sure of that.

 

[AllenChicago]

If they do a partial commission chargeback, how would a company identify which polices to recoup commissions on? Those we sold during ________ timeframe and only those with the lowest claims?

Wouldn't calculating, programming and executing these chargebacks increase their Administrative Overhead and the money they take from us increase profits? Both are "no-no's" in this MLR environment.
-ac

 

[somarco]

If they do a partial commission chargeback, how would a company identify which polices to recoup commissions on? Those we sold during ________ timeframe and only those with the lowest claims?

Wouldn't calculating, programming and executing these chargebacks increase their Administrative Overhead and the money they take from us increase profits? Both are "no-no's" in this MLR environment.

MLR is calculated on the entire block with segregation allowed on group health vs individual. Chargebacks, if a carrier decides to do that, would probably be done on a percentage basis.

If their MLR rebate (premium refund) is 1.5% on individual and 1% on group (just pulling figures out of the air) I would anticipate they would do likewise to your commissions.

At this point, HHS doesn't focus on profits, only admin expense ratio's. They don't care how much profit a carrier makes, or even if they make a profit.

 

[Crabcake Johnny]

Aetna and UHC seem to love the MRL regulation. The Aetna CEO praised it and UHC's profits rose due to it.

 

[dgoldenz]

If they actually implement that and start charging their agents back, then who in their right mind would give them another piece of business. The agent would have no clue as to what they'd actually make.

Horrible move. It certainly wouldn't done "quietly." I'd make sure of that.

x2, I'd never write another policy for them again.