Aetna's Puzzling Moves..

[Broker22]

Does anyone understand Aetna individual strategy? I was just inundated with some info I am trying to understand. Getting a lot of double talk from them about renewals ,commissions..new plans for 2014. Unlike most carriers that are using a "early renewal Strategy" policyholders being able to keep the current coverage until 12-2014,with same coverage ,premium and commission. They are using a "repurchasing strategy" where it seems non-grandfathered policyholders MUST purchase a ACA plan for 01-01-2014 E.D Brokers will remain the B.O.R. and be paid but I am not being told how much. And now they are sending letters out to non grandfathered policyholders(even newly written policies) telling some they can keep their current plan or purchase a new one. Others also non-grandfathered are being told they MUST "repurchase"come December 12-2013 . I am skeptical as this carrier was the first to cut to 4% back in 2010 when some were still paying 15-20% of first year premium. Something's fishy here.. Any thoughts or does anyone understand what they are doing ?

 

[MyFIT]

Aetna is only trying to do what assurant took the lead in doing. Assurant calls it "sell certainty" so that your client is certain that coverage will keep same rate untill dec 2014.(Im an mga for most carriers) carriers have been trying to follow that lead. As for commissions, I am unsure of what future is to hold on these plans.. if I where you I would watch what bcbs does so you can get an idea of worst case scenario comp will be and watch assurant and uhc for new products. I feel that aside from aca plans fixed benefit plans may be the talk of the future as carriers can keep beefing them up. Im hearing Talk of uhc and aetna working on fixed bene frenzies for those who dont qualify for subsidy and dont wanna pay big premiums...

 

[AllenChicago]

I received the email from AETNA today as well. They're referring to two letters being sent out to existing non-grandfathered clients, depending their 2013 anniversary dates. It's strange, but at least they're communicating with us. If only our Illinois BLUE CROSS company was as agent-friendly. -ac

Excerpt from 6-18-2013 AETNA Email to Agents:
Check out the new communications your clients might receive:

• Letter to non-grandfathered clients with January - July anniversary dates, telling them that they'll have options to move into a new plan. Note: This letter will be mailed the week of June 21.

• Letter to non-grandfathered clients with August-December anniversary dates, telling them that they can stay in their current plan until their anniversary date. Note: Some members with an August anniversary date will receive letters by July 1.. The remainder of the letters will be mailed on a monthly basis approximately 60 days before the member's anniversary date.

-----snip----

 

[Dave020]

Except in California where Aetna will terminate all non-grandfathered plans 12/31/13.

 

[Post Quartermaster]

Now that Aetna has completed their acquisition of Coventry, lets hope they do not screw that up......most folks in the industry, from what I hear, saw the acquisition as buying a medicare/medicaid block, but Coventry is showing up in ffe's in some odd places

 

[Yagents]

There is no policy year mentioned in email

 

[Ann H]

Aetna is only trying to do what assurant took the lead in doing. Assurant calls it "sell certainty" so that your client is certain that coverage will keep same rate untill dec 2014.(Im an mga for most carriers) carriers have been trying to follow that lead. As for commissions, I am unsure of what future is to hold on these plans.. if I where you I would watch what bcbs does so you can get an idea of worst case scenario comp will be and watch assurant and uhc for new products. I feel that aside from aca plans fixed benefit plans may be the talk of the future as carriers can keep beefing them up. Im hearing Talk of uhc and aetna working on fixed bene frenzies for those who dont qualify for subsidy and dont wanna pay big premiums...

Thank you for that information. It's likely that beefed up fixed indemnity plans could play a big role, particularly for IFP. I likewise expect Assurant and UHC to test radically new product designs, and also perhaps Cigna. I expect Aetna to try out skinny networks on the private market, but I don't expect it to gain traction. I think the worst commissions will come from a carrier other than the Blues, and then that commission schedule might be changed when that carrier realizes their mistake (a carrier or two did that when MLR hit). But I agree that the commission the Blues sets will probably be a baseline. They often use level commission at a lower rate, whereas a competitor may have a higher 1st year and lower renewal commission rate.

 

[timsip]

Aetna is only trying to do what assurant took the lead in doing. Assurant calls it "sell certainty" so that your client is certain that coverage will keep same rate untill dec 2014.(Im an mga for most carriers) carriers have been trying to follow that lead. As for commissions, I am unsure of what future is to hold on these plans.. if I where you I would watch what bcbs does so you can get an idea of worst case scenario comp will be and watch assurant and uhc for new products. I feel that aside from aca plans fixed benefit plans may be the talk of the future as carriers can keep beefing them up. Im hearing Talk of uhc and aetna working on fixed bene frenzies for those who dont qualify for subsidy and dont wanna pay big premiums...

I think we covered this six months ago. Not much news here, but thanks.

 

[RayNY]

Official data is starting to trickle out:
Aetna Small Group Off Exchange Rate filings (NY)
https://myportal.dfs.ny.gov/documents/538523/1074030/Aetna+Health+Inc._SG+HMO_AETN-128992632.pdf

Pretty clearly indicates that there will be a ~2.4% commission based off of a variable scale (I assume based on production). Half a dozen plans, all HMO.

I know you remember my "sky is falling" attitude. Let's just say, now that the NY filings are out, Aetna looks really good compared to some of the other carriers, but it's not the worse case scenario. Sky fell, wasn't as bad as I was expecting.

 

[Broker22]

This "repurchasing strategy" is different than what other carriers are doing. I believe many carriers are using a "loophole" in the ACA to allow renewal of existing individual policies until 12-2014. I am being told premium will remain same except for age band type increases. Commission will remain the same for these already written plans until 12-2014 ie status quo. Aetna repurchasing strategy is ; non-grandfathered plans with ED'S of 1/01- 7/01 will be allowed to keep their plan until December 2013. Yes 2013. At that time they must "repurchase" a non ACA plan which will be ,I think, very similar to the plan they are on now in benefits and premium. My concern is they are mum on commission on these "repurchased" plans , many of which will be still in first year commission. For example a plan written with ED of 7-01-2013, must go through the "repurchase" process 12-2013. So if it goes to renewal commission January 2014 Agent loses six months of first year commission. I understand they will be able to keep this "repurchased plan" until 12-2014,so there is the similarity to what other carriers are doing. However, plans written with ED's of 8-01-2013 to 12-2013 do not have to repurchase. They may do so if they wish.They will have to go to a ACA plan in 2014 when their plan would renew. Letters are being sent out by the Carrier to all policyholders advising them of this program. I was told that the agent can do the repurchase,but if the Carrier does it direct the Agent will still be B.O.R and be paid,but not told what commission will be. I am thinking it will be renewal only. (10% vs 4%). Also the letter advises policyholders they may qualify for a subsidized ACA policy and apply for one. Again not being told if agent will be B. O R for the ACA sold policies. I'm assuming not. So they may "repurchase" and we get 4%.I believe. Or they buy an ACA product and we get Zero. As usual there are unanswered questions so tread carefully, as I mentioned on initial post they were first carrier to cut and went to 4% first year commission after MLR hit ,now are back up to 10% first year(started in 2013). I like this company and want to continue to write a lot of business with them. But remember Bertolini doesn't make 10 million a year for nothing !