Question on Coercion/Rebating

[bill3173]

Medicare client wanted husband to get plan through me, but employer directed him to an agency that they use for employees and he was told that he would be partially remimbursed for the plan.

Like you, at first I thought that okay, this is a group medicare plan and he was directed to the group admin, and she just didn't understand.

Well, she contacted me several times, and I told her to let me know how it turned out. Well it's not a group plan, just a dipshit agency, but the agent told her that he is "handling" the authorization of the funds that the employer distributes, which means if the emp doesn't purchase through him, there will be no reimbursement.

Here's my question, is this legal? The employer can do whatever he likes, but is it legal for an insurance agent to be a party to this type of action. He told the emp point blank that if he didn't use him as an agent, he wouldn't get the employer's money. My understanding is this is Coercion first and rebating second for an agent to be party to this type of action.

Ever bumped into something like this?

 

[bluediamond]

Well I have a deal with 2 large McDonald's franchisee's for under 65, but I have never told anyone they have to purchase from me. They could purchase from another agent but the franchisee's trust me with their bank account number's. If the person is uninsurable I send them back to their respective office and they place them on McDonald's corp group.

 

[somarco]

Bill, I have run in to this a few times lately. In these situations the employer is terminating the retiree plan and providing a subsidy via HRA instead. The HRA benefits are administered by a firm that handles enrolling the retiree in an MA or gap plan. I have read their paperwork on the process, and the HRA funds are only available if they use the designated agency.

It sucks.

 

[Guest]

This is exactly what "Dupont" is doing. Have to use their dipshit brokerage after I do the in home appt. and tell how everything works, he then tells me "thank you but i have to use agency xyz to get it, but hey, i appreciate you taking the time."

 

[Midlevel]

Goodyear doing the same thing for certain employees who retired before 1991. Offering them $1200 the 1st year but have to go through Extend Health which has the same plans all of us have. Sounds like rebating to me.

 

[bill3173]

I have read their paperwork on the process, and the HRA funds are only available if they use the designated agency.

In this case, they only had the choice of one Supp Carrier, and yes, it is most likely an HRA situation. She just wasn't able to explain it to me, but this is my assumption.

Regardless, it still seems to be inconsistent with insurance regulation. You must select this plan/agent, or you get nothing. Isn't that the very definition of coercion?

Anyway, it is what it is, but rightly or wrongly, it casts a different light on agents that practice this way in non hra situations. I mean really, we've come down pretty hard on agents that made people feel that they are screwing up if they don't buy a particular carrier/plan from them, yet you have companies dictating the terms of "individual" coverage.

I know that's an over simplification, but it still comes down to a coercive situation and I'm taking this matter up at my next meeting with the secretary of commerce.

 

[Justin Bilyj]

This looks like something that should be prohibited by TPTB. This issue should be looked at more.

 

[policy doctor]

I ran into simmilar situation a couple years back. The co was Whirlpool and their "agency" somewhere in Utah.
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Forgot to add....they used "aarp" med supps.

 

[somarco]

it still seems to be inconsistent with insurance regulation. You must select this plan/agent, or you get nothing. Isn't that the very definition of coercion?

Could also be considered a tie-in sale, which is also illegal.

The HRA money is "free" but only if you buy an "approved and endorsed" product. I don't like it but easier to find someone else than beat it to death.

One of the retiree deals I ran across was using a group plan. Not a true Medigap, more of a hybrid. Slick deal for the agents pushing it and not bad for the retiree as long as the plan remains competitive.

 

[yogooglethis]

Medicare client wanted husband to get plan through me, but employer directed him to an agency that they use for employees and he was told that he would be partially remimbursed for the plan.

Like you, at first I thought that okay, this is a group medicare plan and he was directed to the group admin, and she just didn't understand.

Well, she contacted me several times, and I told her to let me know how it turned out. Well it's not a group plan, just a dipshit agency, but the agent told her that he is "handling" the authorization of the funds that the employer distributes, which means if the emp doesn't purchase through him, there will be no reimbursement.

Here's my question, is this legal? The employer can do whatever he likes, but is it legal for an insurance agent to be a party to this type of action. He told the emp point blank that if he didn't use him as an agent, he wouldn't get the employer's money. My understanding is this is Coercion first and rebating second for an agent to be party to this type of action.

Ever bumped into something like this?

I have consumers that were told by Extend Health to attend my seminar to learn about UHC Medicare plans.I have had sucess with the Extendhealth consumers that I get a chance to talk with and reason with and explain that they will still get their monthly retirement health plan stipend though Extendhealth and get the same cost of benefits even if i enroll them and they will get the service of a local agent with many years if experience.The rule is as long as they get at least one of their retiree health products through Extendhealth ( health,pdp,dental,vision,etc)they still get the stipend so if I write an MA they get their dental through Extendhealth then their good to go.If they get Med supp from me they get their PDP through Extendhealth or sometimes I get both the Med Supp and PDP and they get dental or vision from Extendhealth. I really talk up ExtendHealth's dental plan picking skills.hehe

If you can get the consumer to trust you a little up front it s easy to undermine Extendhealth's creditability especially when it comes to PDP and Med supps plans...I know for a fact they do not as a rule show the consumers the lowest cost plans. Extendhealth will enroll them in any PDP plan the consumer request so I run the medicare.gov formulary finder for them and tell them which plan they should request.You would be surprised how many times the PDP plan they show is not the lowest cost.In Florida the Med supp is easy because the lowest premium is almost always UHC but when my uncle in Ca.GM retiree health benefits were slashed they hired Extendhealth to handle it ( or i should say Extendhealth agreed to rebate GM part of their commissions in exchange for a giant stack of Glengarry Glen Ross Leads ) and neither the Med supp nor the PDP they recommended was the lowest premium/ most cost effective.Also Extendhealth's customer service is horrible and chances are if the consumer has dealt with them at all they all ready now this.I had one guy who was begging me to be his agent after he had already signed up with Extendhealth because he was so disgusted with the service.

I had couple at a seminar today who are interested in UHC Medicare products and their employer recommended they use AON Hewitt Navigators which like ExtendHealth helps large corporations dump retirees...i mean transition retirees from group to individual Medicare health insurance. This couple had brought there information from their employer and the letter from the company clearly said that they were not required to use AON Hewitt to be eligible to get their 400.00 monthly health benefit stipend.These consumers said that their employer said that once they decide which carrier they decide on they will recommend a local agent to help them.Sounds like instead of rebating to get the leads like Extendhealth AON Hewitt is selling leads.It was kind of funny that they came to my seminar because they already knew they where most interested in the UHC plan because all their doctors take the plan so now that I further educated them on the plan and gave them all the sales materials including a provider directory they will now call and AON Hewitt will recommend a good agent that writes that plan.

Aon Hewitt Navigators®: Post-65 Retiree Health Care Exchange