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Insurance brokers sue state Obamacare exchange over unpaid commissions


Nevada’s health insurance exchange faces yet another big lawsuit.

Six brokers filed a lawsuit Tuesday in Clark County District Court, seeking class-action status for their claim that the Silver State Health Insurance Exchange and its website contractor, Xerox, have failed to pay commissions on coverage they sold through the exchange’s Nevada Health Link website.

The brokers are Patrick Casale, Mary Elsberry, Dwight Mazzone and Jeremy Shugarman of Clark County, and Grace Butler and Andrew Perwein of Washoe County.

Matt Callister, an attorney representing the brokers, said the six are collectively owed “a very significant amount well in excess of $200,000.”

Xerox spokeswoman Jennifer Wasmer and exchange spokesman Tyler Klimas said late Wednesday that their organizations wouldn’t comment on the pending litigation.

Callister said he took the case after touring the state to interview potential parties in another class action his firm filed in April.

That lawsuit, now with more than 200 plaintiffs, involves consumers who paid for coverage through the exchange but never received a policy and have been unable to get medical care.

Callister said he heard horror stories from consumers and from their insurance brokers.

“It’s atrocious. They were telling me, ‘I had to borrow against my house, and then I had to borrow against my car, just to survive,’” he said.

“Brokers are very reliant on their source of income every 30 days. It’s a whole secondary crisis here. Some of these people are going to be bankrupt.”

Callister said he doesn’t know why the exchange isn’t paying commissions. Nor does he know how many brokers might be involved.

He did note that as many as 1,500 brokers are licensed to sell through the exchange.

Mazzone declined to discuss the lawsuit in detail Wednesday, though he did say “it makes life extremely difficult when you don’t get paid after working very hard.”

He said the lawsuit was necessary because there doesn’t seem to be a resolution on the way from Xerox.

Commissions are supposed to be paid to brokers by insurers once the consumer pays for coverage.

The lawsuit claims the defendants failed in their duty to ensure broker producer numbers and other identifying details were provided to insurers. It also alleges Xerox and the exchange “improperly retained premiums paid by consumers and collected interest on those premiums for months while causing unnecessary delays in the payments of commissions to brokers and agents.”

What’s more, the state exchange “breached its duty” to “use reasonable care in conducting due diligence” on a contractor for Nevada Health Link, the filing said.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.

 

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