Texas insurance agency alleges carrier owes agents thousands in commissions

Tracy McMillan alleges her Texas-based insurance agency is out $500,000 because a health insurance carrier hasn’t paid commission on coverage the agency has sold.

McMillan is president at Marketplace Insurance Exchange in Arlington, Texas. Her agency, she alleges, hasn’t been paid commissions from Friday Health Plans since that carrier was ordered to exit the Texas health insurance marketplace earlier in November. The Texas Department of Insurance ordered Friday Health Plans to stop offering health policies for 2023 on that state’s Affordable Care Act marketplace, although the carrier continues to offer off-exchange plans.

Open enrollment for health insurance on the ACA marketplace began Nov. 1.

Friday Health Plans could not be reached for comment. However, a company spokesperson told the Alamosa (Texas) News that Friday Health enrolled more people in Texas than it had anticipated, which meant increased costs of operation. As a result, the Texas Department of Insurance asked the company to pause its operations in that state.

But the pause has led to a pause in paying agent commissions, something that McMillan said is hurting her agency and the agents who enrolled clients in coverage.

“We have about 200 agents and we are out about a half-million dollars since August,” McMillan told InsuranceNewsNet. “We have only been paid through August. We have not been paid for September, October or November.”

McMillan said she may have to cover the missing commissions for her agents, and noted that many of them will not be able to pay their bills without those commissions.

'Technical glitch' cited

She said Friday Health Plans notified her that the failure to pay commissions was because of what they called “a technical glitch.”

“They keep sending us messages every few days telling us to bear with them. But I think they need to be honest with us about what’s really going on,” she said.

Friday Health Plans’ failure to pay commissions is the latest in a long series of issues with health insurance carriers not paying agent commissions for plans sold in the ACA marketplace. Agent associations such as Health Agents for America have been vocal in their fight for their members’ ability to get paid for serving their clients. HAFA members have told Congress and federal regulators about their ongoing concern with many carriers not paying commissions to agents for new enrollments or enrollments during special enrollment periods under the ACA.

HAFA president and CEO Ronnell Nolan told InsuranceNewsNet that her association’s members who sell Friday Health Plans coverage in Texas are owed “tens of thousands, even hundreds of thousands of dollars in commissions.”

“Our members are trying to pay their employees, trying to support their families, trying to pay their bills and they are caught up in this,” she said.

Nolan said she wants to meet with the Texas Insurance Commissioner to discuss this issue and see whether the insurance department can help her members get their commissions. “Our members need to be paid and Texas Health Plans needs to fix this,” she said.

A spokesman for the Texas Department of Insurance declined to comment to InsuranceNewsNet.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].