PDF UnitedHealthcare Producer Compensation

UnitedHealthcare Producer Compensation

Producer FAQ ? For External Use

Definitions of Terms

The following Q-and-A pertains to a new administrative service now being deployed market-by-market by UnitedHealthcare to facilitate the collection and disbursement of fees the customer will pay the producer for services rendered. Here are definitions of the terms used in this FAQ.

Service provider: A licensed producer who provides services to the customer in regards to the customer's group health plan. Service fee: A fee paid by the customer to the service provider for services rendered. Service Fee Agreement: An agreement between the customer and producer outlining their agreement to compensate the producer for services provided in relation to customer's group health plan. UnitedHealthcare is not party to this agreement. Billing & Collection Agreement [Billing Agreement]: An agreement between the customer, service provider and UnitedHealthcare that outlines the service fees agreed upon between the customer and the service provider, and the terms and conditions for UnitedHealthcare's billing the customer, on behalf of the service provider, for the Service Fee. The Billing Agreement presumes the existence of a Service Fee Agreement between the customer and producer. Billing & Collection Agreement Exhibit [exhibit]: The exhibit is part of the Billing Agreement. It summarizes the specifics of the service provider and service fees agreed upon between the customer and producer. This exhibit is signed by an authorized representative of the customer.

General Overview

1. What are the changes that UnitedHealthcare is making to its producer compensation plans? 2. What is changing? 3. When is UnitedHealthcare planning to make this change? 4. Why is UnitedHealthcare making this change to producer compensation in the 100+ employer market and 51-99 in

select states? 5. Is UnitedHealthcare making this change in producer compensation to make it easier to hit its minimum loss ratio

(MLR) requirement? 6. When will UnitedHealthcare cease to include commissions in its 100+ and 51-99 premium rates? 7. How will groups be handled that grow from small group into large group, or vice versa, within a plan year? 8. What, if anything, do you intend to send directly to new and renewing customers to communicate the rationale and

effects of this change as it is implemented? 9. How will this change impact customers who also purchase stand alone specialty benefits? 10. Is this change only for fully insured? What about self-funded (ASO), split funded clients and Stop Loss?

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UnitedHealthcare Producer Compensation | Producer FAQ ? For External Use

Service Fee Administration

11. Will UnitedHealthcare facilitate the billing, collection and payment of service provider fees? 12. Is an agreement required for the billing/collection process? 13. Will a formal agreement between the customer and service provider be required before entering into an agreement with

UnitedHealthcare to facilitate the service fee administration? 14. Who signs the Billing and Collection Agreement? 15. What if the client refuses to sign the agreement, or wants to modify the agreement? 16. Is the Billing Agreement evergreen until changed or will we have a set term (e.g., 12 months)? 17. The Billing Agreement notes it could take up to 60 days for payment to be remitted to the Service Provider. Is that

consistent with commission payment processing timelines? 18. Why does the Billing Agreement show different notice periods (30 vs. 60) for changes to the agreement and termination

of the agreement? 19. Will UnitedHealthcare accept faxed/scanned documents? 20. What if there is no Billing Agreement? Is anything needed in order to recognize the producer/customer relationship even

if we have an AOR letter on file or if the case is non-commissionable today? 21. Is the Client Acknowledgement Letter evergreen? Or does it need updating annually? 22. Who determines the service fee and how is it calculated? 23. Will UnitedHealthcare prescribe any upper limits on fee-based compensation? 24. How will UnitedHealthcare administer the service fee billing process? 25. Will UnitedHealthcare allow another service provider to replace the current service provider and charge a different

service fee? 26. How does the removal of the commissions impact the customer's premium? 27. Does the service provider have to be licensed and appointed with UnitedHealthcare in order to have a Billing Agreement? 28. May customers make changes during the plan year to the service fees agreed upon with their service provider? 29. How will takeover business be impacted if there is a change in Broker of Record (BOR)? 30. What are the deadlines for the signed Billing Agreement? 31. What happens if we want to set up administration of service fees after the renewal or new business effective date?

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UnitedHealthcare Producer Compensation | Producer FAQ ? For External Use

Billing and Broker Payment

32. What happens when customers pay less than the amount due? 33. How will this change be integrated into the online billing and eligibility process? 34. Will the service fee be reflected in the premium calculation for new business offers or renewals? 35. How will self-billed accounts be handled? 36. What will be the timing of the service fee payments to service providers? Do you anticipate any interruptions in the normal

producer compensation payment cycle as you implement these changes?

Additional Information

37. Does this change create changes to 5500 reporting requirements? 38. Will you also issue 1099s for service fees paid? 39. How will the customer know the amount to report in the 1099? 40. What tax ID does the customer use for payor on the 1099? 41. Will you continue to issue 1099s for commission payments? 42. What if the agency is receiving payment? Is a 1099 required? 43. What will we do if legislation passes that removes broker commissions from premium? 44. How are different aggregated relationships treated? 45. Historically, UnitedHealthcare has not allowed non-commissioned business to accrue toward any Broker Bonus

programs, will that change? 46. NOTE ? FOR ARKANSAS PRODUCERS ONLY: What are the requirements for a producer to secure their consultant

license required by the State of Arkansas? 47. NOTE ? FOR GEORGIA BROKERS ONLY: What are the requirements for a broker to secure their consultant or counselor

license required by the State of Georgia? 48. NOTE ? FOR MONTANA PRODUCERS ONLY: What are the requirements for a producer to secure their Consultant

License required by the State of Montana? 49. NOTE ? FOR UTAH PRODUCERS ONLY: What are the requirements for a producer to secure their consultant or

counselor license required by the State of Utah? 50. NOTE ? FOR VIRGINIA PRODUCERS ONLY: What are the requirements for a producer to secure their Consultant

License required by the State of Virginia?

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UnitedHealthcare Producer Compensation | Producer FAQ ? For External Use

General

Q What are the changes that UnitedHealthcare is making to its producer compensation plans? A 2-50 - We will continue our long-term practice of reviewing base commission schedules for groups with up to

50 employer market on a regular basis and will adjust schedules as competitive factors dictate. 51-100 - We have been reviewing our compensation program for groups in the 51-100 employer market. We have concluded that, after providing appropriate notice and transition period, commissions will no longer be included in our premium rate for groups in the 51-100 employer market in some states. This change will be implemented on a state-by-state (market) basis. 51-100 groups will not move to the service fee model in states that define Small Business as 1-100. 101+ - For many states, commissions may no longer be included in our premium rate for employer groups in the 101+ employer market. This change is being implemented on a state-by-state (market) basis

Policy Changes for Groups with 51+ Employer Market

Q What is changing? A In many markets, UnitedHealthcare is moving to a non-commissionable basis for groups in the 51+ employer market.

Q When is UnitedHealthcare planning to make this change? A We began implementing this change for groups in the 101+ employer market for new and renewing business

effective on or after Jan. 1, 2012. On April 1, 2013 51-100 business moved to the Service Fee model in select states. Additional markets are being implemented throughout 2017. Advance notice is provided to the applicable producer community to allow adequate time to prepare before a market moves to service fees.

Q Why is UnitedHealthcare making this change to producer compensation in the 51+ employer market? A ?The regulatory and market environment has put increased pressure on insurers to reduce administrative

expenses and increase transparency. ?Producers provide a wide variety of valuable administrative services for their clients. However, these are not

administrative services of the insurer. Moreover, the compensation for these services is not determined by the insurer but is negotiated between the employer and the producer. Consequently, we believe that this change more accurately reflects the current relationship and allows producers and their clients to negotiate directly for appropriate reimbursement for services provided without undue downward pressure from carriers.

Q Is UnitedHealthcare making this change in producer compensation to make it easier to hit its minimum loss ratio (MLR) requirement?

A The Patient Protection & Affordability Care Act (PPACA) regulations require insurers to reduce administrative expenses and will drive toward greater transparency across the health care system. Rather than us determining the value of your broker and level of their compensation through administrative changes we must make, we believe both are more appropriately handled directly between the client and the producer. This change supports that approach.

Q When will UnitedHealthcare cease to include commissions in its 51+ premium rates? A In impacted markets, new and renewal business from the date of implementation forward will no longer

include commissions as a component of premium. If service fees will be administered by us, we will provide new and renewal business exhibits that show calculations inclusive of fees to support discussions with clients. Notwithstanding the above, all changes will also take into account specific contractual and regulatory requirements.

Q How will groups be handled that grow from small group into large group, or vice versa, within a plan year? A The usual rules related to case size segment will apply.

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UnitedHealthcare Producer Compensation | Producer FAQ ? For External Use

Q What, if anything, do you intend to send directly to new and renewing customers to communicate the rationale and effects of this change as it is implemented?

A A customer communication is available from your UnitedHealthcare representative.

Q How will this change impact customers who also purchase stand alone specialty benefits? A This change has no impact on producer compensation for stand alone and/or non-embedded specialty benefits.

Q Is this change only for fully insured? What about self-funded (ASO), split funded clients and Stop Loss? A This change impacts only fully insured medical business. ASO and Stop Loss are not affected by this change. If

a client has both fully insured and ASO medical plans, and currently pays commissions on the fully insured plan, that fully insured plan is in-scope and will be required to transition to service fees if the group has medical policies sitused in one of the in-scope states.

Service Fee Administration

Q Will UnitedHealthcare facilitate the billing, collection and payment of service provider fees? A If engaged to provide the service and permissible in the state, UnitedHealthcare will offer an administrative service

to facilitate customer billing and payment of service fees to the service provider. UnitedHealthcare does not collect a separate fee for this billing service, but may retain the nominal amount of interest earned on the service fee while in our possession

Q Is an agreement required for the billing/collection process? A Yes (if the UnitedHealthcare billing/collection process is to be used), a Billing Agreement will be necessary between

the customer, the service provider and UnitedHealthcare. It spells out the terms and conditions under which the service fee is collected and paid to the service provider. In addition, certain states may require a written agreement between the service provider and the customer if the service provider is charging a fee directly to the customer. Collection of the service fee will begin after all of the requirements have been met, and the service fee will not be collected retroactively.

Q Will a formal agreement between the customer and service provider be required before entering into an agreement with UnitedHealthcare to facilitate the service fee administration?

A Yes, the Billing Agreement assumes there is a formal arrangement such as a Service Fee Agreement between the customer and service provider.

Q Who signs the Billing Agreement? A The signature for an Agency: Preference is that a senior member/president/owner of the agency sign the Billing

Agreement. However, as long as the person signing on behalf of the agency has the authority to bind it, then that person can sign. If an agent is signing; we would like it to be the actual agent being designated by the customer. The signature for the client: An authorized representative from the client must sign both the Billing Agreement and Exhibit page.

Q What if the client refuses to sign the agreement, or wants to modify the agreement? A We do not modify the agreements. This is an optional service offered at no additional charge to the customer and

service provider (although UnitedHealthcare will keep the nominal amount of interest earned while the service fee is in our possession). UnitedHealthcare does not require that anyone use this service and the customer and service provider may make their own arrangements.

Q Is the Billing Agreement evergreen until changed or will we have a set term (e.g., 12 months)? A Yes, the agreement is evergreen as long as the same producer continues to support the client and the same

Service Fee amount applies. Clients/Producers do not need to submit documentation yearly. UnitedHealthcare representatives will confirm annually to support our internal processes.

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