New Law Adds Protections for Health Insurance Broker Contracts
On Monday, Gov. Jerry Brown (D) signed a bill (AB 1163) to protect insurance brokers from last-minute changes to their contracts with health plans, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 10/6).
More than 12,600 insurance agents are certified to sell health plans through Covered California (California Healthline, 4/13). Certified agents also are required to help individuals enroll in Medi-Cal regardless of compensation under their contracts with the exchange.
Medi-Cal is California's Medicaid program (California Healthline, 8/25).
Details of Bill
Under AB 1163, by Assembly member Freddie Rodriguez (D-Pomona), insurers will be required to provide brokers with 45 days' notice before making major changes to their contracts.
For example, insurance agents would be protected from short-notice, unilateral changes, such as when a company on Dec. 23, 2014, said it planned to cut commissions down to 1%, effective three days after the announcement.
The notice requirement does not apply to changes that are:
- Mutually agreed upon; or
- Necessary under changes to state or federal law.
Michael Lujan -- president of the California Association of Health Underwriters, which was a sponsor of the bill -- said, "This is a big win for agents," adding, "We have [the protection] in property/casualty, but not in health care."
Lujan added that the protection also is necessary to help hundreds of agents who assist Californians enroll in coverage late in the year (Sacramento Business Journal, 10/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.