State Officials Plan To Review Aetna’s Plan To Separate Brokers’ Fees
Regulators at California's Department of Insurance and Department of Managed Health Care say they are waiting to review Aetna's proposal to change the way it charges for insurance brokers' fees, the Los Angeles Daily Journal reports.
Starting in February, Aetna plans to list brokers' fees and premiums as separate charges when billing large groups, such as employers. The company previously folded the brokers' fees into the total cost of group plans.
New Federal Requirements
Aetna's change in cost structure likely stems from an effort to prevent brokers' fees from counting as premium costs under the federal health reform law's medical-loss ratio requirement, according to the Daily Journal (Gallegos, Los Angeles Daily Journal, 1/26).
Starting on Jan. 1, 2011, the reform law required all large group health plans to spend at least 85% of premiums on medical services and quality improvement. Individual and small-group health plans have an 80% medical loss-ratio requirement.
Under the overhaul, insurers will need to pay a rebate to policyholders if their medical-loss ratios fall below the new limits (California Healthline, 11/29/10).
Weighing In on Aetna's Plans
Anjanette Coplin, spokesperson for Aetna, said the change in cost structure is part of the company's efforts to improve efficiency and streamline operations to comply with the federal medical-loss ratio requirements.
However, Timothy Jost -- a professor at Washington & Lee University School of Law -- said the brokers' fees will continue to count toward premium costs if Aetna collects the money directly from enrollees.
So far, no federal agencies have taken a position on Aetna's fee change (Los Angeles Daily Journal, 1/26).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.