R590. Insurance, Administration.R590-207. Health Producer Commissions for Small Employer Groups.
R590-207-1. Authority.
This rule is promulgated by the commissioner pursuant to Sections 31A-2-201 and 31A-30-104.
R590-207-2. Purpose and Scope.
(1) The purpose of this rule is to establish guidelines relating to commission structure for insurance producers in the small employer group market that affect access to health insurance coverage for small employer groups.
(2) This rule applies to a carrier offering a health benefit plan in the small employer market.
R590-207-3. Definitions.
Terms used in this rule are defined in Sections 31A-1-301 and 31A-30-103.
R590-207-4. Commission Schedule Structure.
(1) A carrier may not structure a producer commission schedule that, directly or indirectly, creates a restriction, hindrance, or barrier to access to coverage for the smallest groups or groups with the greatest health risks.
(2) The commission in the commission schedule for the smallest groups or the groups with the greatest health risks may not be designed to avoid, directly or indirectly, the requirements of guaranteed issue or renewal in the marketing of health insurance to small business owners.
(3) An insurer may not design a commission structure that lessens the incentive to insure a small employer group that is smallest in size or with the greatest health risks.
(4)(a) An insurer is not required to base commissions on a percentage.
(b) An insurer may elect not to pay commissions on all business.
(c) An insurer may elect to pay a dollar amount based on factors other than risk characteristics.
(5) Examples of commission structures that comply with this rule include:
(a)(i) a 10% commission for group size 2-5;
(ii) a 9% commission for group size 6-25; and
(iii) a 7% commission for group size 26-50; or
(b)(i) $20 per member per month (PMPM) for group size 2-5;
(ii) $18 PMPM for group size 6-25; and
(iii) $16 PMPM for group size 26-50.
(6) An example of a commission structure that does not comply with this rule is:
(a) 3% commission for group size 2-5;
(b) 8% commission for group size 6-25; and
(c) 7% commission for group size 26-50.
R590-207-5. Severability.
If any provision of this rule, Rule R590-207, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.
KEY: insurance law
Date of Last Change: August 8, 2022
Notice of Continuation: July 21, 2026
Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-2-202
