Insurance brokers who sold health plans through a failed nonprofit carrier will no longer be paid commissions.
Nevada Health CO-OP has stopped commission payments effective immediately, according to a Friday notice from an attorney working on behalf of the Nevada Division of Insurance.
“Preliminary review indicates that (Nevada Health CO-OP) is in hazardous financial condition,” wrote Patrick Cantilo, of the Texas law firm of Cantilo & Bennett, in a letter sent to local insurance brokers. “We are focusing our efforts on the protection of (the CO-OP’s) members and their health care coverage. We are also evaluating how best to protect the interest of (the CO-OP’s) creditors, including its agents and brokers. The financial condition of (the CO-OP) requires that we conserve its financial resources.”
Cantilo’s letter said his firm was “unable to advise” brokers “at this time” how commissions will be evaluated and paid, but he said the claims “are a top priority for the receivership team.”
The state’s Division of Insurance was granted receivership of the CO-OP in Clark County District Court on Oct. 1, less than two months after the CO-OP said it would close because of high claims costs and limited forecasts for enrollment growth. The division has taken control of the insurer’s assets, distribution of funds and administration.
The division appointed Cantilo & Bennett special deputy receiver.
The CO-OP’s health insurance plans are still in effect through Dec. 31, and members can use their plans to get health care.
The Las Vegas-based CO-OP was created by the federal Affordable Care Act to provide competition among insurers in the individual coverage market. It borrowed $65.9 million from the federal government to get off the ground in 2012.
It has not made profits to repay the loans: The CO-OP reported a $19.3 million operating loss in 2014, and losses of $22.7 million from January through June.
It’s the fourth of 23 Obamacare CO-OPs to fail nationwide.
Contact Jennifer Robison at firstname.lastname@example.org. Find @_JRobison on Twitter.