Insurance and Real Estate Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-924

Title:

AN ACT REQUIRING THAT HEALTH CARRIERS USING THE CONNECTICUT HEALTH INSURANCE EXCHANGE PAY A MINIMUM COMMISSION TO CERTAIN INSURANCE PRODUCERS.

Vote Date:

3/9/2017

Vote Action:

Joint Favorable

PH Date:

3/7/2017

File No.:

212

SPONSORS OF BILL:

Insurance and Real Estate Committee

REASONS FOR BILL:

Currently, brokers who work, develop, and distribute health care plans sometimes have their plans end up directly on the public exchange. Once the plan is on the exchange and sold, the broker does not receive any type of compensation in the form of a commission for the work he or she did with regards to the plan. This bill would seek to remedy this situation by providing broad-based guidelines for some type of a commission paid to the broker though the dollar amount is not specifically stated in the bill.

RESPONSE FROM ADMINISTRATION/AGENCY:

Theodore Doolittle, Healthcare Advocate, Office of the Healthcare Advocate noted that brokers play a critical role in developing, distributing, and selling health care plans and that these plans often end up on the exchange if they meet a certain criteria. He stated that the legislation would create a mechanism for these brokers to receive a commission for the plans that do sell on the exchange system.

NATURE AND SOURCES OF SUPPORT:

Joseph McDonagh, Benefit Brokers

Jesse McDonald, Modern Insurance

Warren Ruppar, Independent Insurance Agents of Connecticut

All expressed support for the legislation as it deems brokers receive a commission for the plans they develop that sometimes appear on the exchange.

NATURE AND SOURCES OF OPPOSITION:

Connecticut Association of Health Plans, stated that the proposed legislation was unnecessary due to the fact that the Exchange Board has already voted to require broker commissions in February 2017. It was also noted that the statutory mandate was “ill-advised” especially at a time where the future of the ACA is unknown. They feel the Exchange Board is the best entity to determine the changes resulting from the cost of broker commissions.

Reported by: Stephen Sanabria, Assistant Clerk

Date: March 27, 2017