Archive for June 19th, 2010

Health Insurance Brokers Face Compensation Changes

Saturday, June 19th, 2010

With the advent of more federal intervention in our health care delivery system, health insurance brokers are concerned for their future. Will they still play a role as the national health care bill takes hold, and if so will they survive financially at the same level of compensation they have come to demand and expect?

Some health insurance brokers will remain active, but many will exit the business. Those that remain will not play as important a role as in the past, but will simply be technocrats and service representatives for a small handful of insurance carriers still active in the market.

Compensation will be paid on a limited per employee basis. For example, the Utah Insurance Exchange (yes, Utah has already set up their own exchange) pays brokers $37 per employee per month commission. One of the BUCA’s is contemplating paying a standard broker commission of $10 per employee per month. This compensation would be separate from the premium calculation and paid through a service agreement with the broker, so as to not jeopardize the Minimum Loss Ratio requirement due to take effective  in January 2011.

How does that compensation compare to todays lucrative health insurance broker compensation package? “Dismal” is the first adjective that comes to mind. A “disaster” is another view and “suicide” a more attractive and viable alternative for some brokers too old (or lazy)  to enter a new profession.

Times are changing, and changing fast. Is “Hope and Change” an oxymoron?

Saturday, June 19th, 2010
Thursday, June 17, 2010, 4:12pm EDT

HM Insurance buys Mutual of Omaha line

Pittsburgh Business Times – by Kris B. Mamula

HM Life Insurance Co. has reached an agreement to acquire Mutual of Omaha’s employer stop loss line, making parent HM Insurance Group among the biggest employer stop loss carriers in the country, the Downtown Pittsburgh company announced on Thursday.

The transaction, which is subject to regulatory approvals, is effective July 1.

“The block complements our current stop loss distribution channel, allows us to achieve greater economies of scale and supports our strategic direction as an expert in health risk solutions,” Michael Sullivan, president and COO of HM Insurance Group, a Highmark company, said in a prepared statement.

The Mutual of Omaha stop loss block of business, with approximately $100 million in annual premiums, will grow HM’s current block of $420 million in premiums by nearly 25 percent, Sullivan noted in the statement. Stop loss insurance is designed to protect self-funded health insurance plans from catastrophic losses.

Read more: HM Insurance buys Mutual of Omaha line – Pittsburgh Business Times