Cal. Code Regs. tit. 10 § 2699.6194

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2699.6194 - Payment to Insurance Agents and Brokers for Sole Employers

(a) This subsection applies to sole employers who have an effective date of coverage prior to September 1, 1998 who have not made an election pursuant to Section 2699.6116.

(1) Except as specified in (2) below, the employer premium shall include an agent and broker fee if an insurance agent as defined in Section 31 of the Insurance Code or broker as defined in Section 33 of the Insurance Code assisted the sole employer in applying for the program, and if the sole employer is determined to be qualified as a result of the application, and the agent or broker requests such payment in writing as part of the application and includes his or her name, license number, tax identification number, and address.

(2) The employer premium shall include an agent or broker fee unless the sole employer's application includes the employer's certification that an agent or broker did not perform all of the following services:

(A) Assist the sole employer in completing the application,

(B) Calculate or determine the cost of program participation for the sole employer,

(C) Assist the sole employer in enrolling the sole employees of the sole employer.

(3) For sole employers who have made application to the program prior to July 1, 1996, the amount of the payment until the time of the qualified sole employer's first annual requalification pursuant to Section 2699.6117 shall be:

(A) For qualified sole employers that have, at the time of application, 2-25 enrollees, the payment shall be $50 for the sole employer per month and $4 per enrollee per month.

(B) For qualified sole employers that have 26-50 enrollees at the time of application the payment shall be $75 for the sole employer per month and $4 per enrollee per month.

(C) For qualified sole employers that have 51 or more enrollees at the time of application the payment shall be $100 for the sole employer per month and $4 per enrollee per month.

(4) For sole employers who have made application to the program on or after July 1, 1996, the amount of the payment until the time of the qualified sole employer's first annual requalification pursuant to Section 2699.6117 shall be:

(A) For qualified sole employers that have, at the time of the application, 2-9 enrollees, the payment shall be $50 for the sole employer per month and $4 per enrollee per month.

(B) For qualified sole employers that have, at the time of the application, 10-20 enrollees, the payment shall be $75 for the sole employer per month and $4 per enrollee per month.

(C) For qualified sole employers that have, at the time of the application, 21-30 enrollees, the payment shall be $100 for the sole employer per month and $4 per enrollee per month.

(D) For qualified sole employers that have, at the time of the application, 31-40 enrollees, the payment shall be $125 for the sole employer per month and $4 per enrollee per month.

(E) For qualified sole employers that have, at the time of the application, 41-50 enrollees, the payment shall be $150 for the sole employer per month and $4 per enrollee per month.

(F) For qualified sole employers that have, at the time of the application, 51 or more enrollees, the payment shall be $175 for the sole employer per month and $4 per enrollee per month.

(5)

(A) Except as specified in (D) below, the sole employer premium shall continue to include an agent and broker fee after the employer's annual requalification pursuant to Section 2699.6117.

(B) For sole employers who had an effective date of coverage before July 1, 1997, the amount of the agent or broker fees after the time of the qualified sole employer's first annual requalification pursuant to Section 2699.6117 shall be as follows:

1. For qualified sole employers that have 2-25 enrollees at the time of application the payment shall be $30 for the sole employer per month and $4 per enrollee per month.

2. For qualified sole employers that have 26-50 enrollees at the time of application the payment shall be $40 for the sole employer per month and $4 per enrollee per month.

3. For qualified sole employers that have 51 or more enrollees at the time of application the payment shall be $50 for the sole employer per month and $4 per enrollee per month.

(C) For sole employers who had an effective date of coverage on or after July 1, 1997, the amount of the agent or broker fees after the time of the qualified sole employer's first annual requalification pursuant to Section 2699.6117 shall be as follows:

1. For qualified sole employers that have, at the time of the application, 2-9 enrollees, the payment shall be $30 for the sole employer per month and $4 per enrollee per month.

2. For qualified sole employers that have, at the time of the application, 10-20 enrollees, the payment shall be $50 for the sole employer per month and $4 per enrollee per month.

3. For qualified sole employers that have, at the time of the application, 21-30 enrollees, the payment shall be $70 for the sole employer per month and $4 per enrollee per month.

4. For qualified sole employers that have, at the time of the application, 31-40 enrollees, the payment shall be $80 for the sole employer per month and $4 per enrollee per month.

5. For qualified sole employers that have, at the time of the application, 41-50 enrollees, the payment shall be $100 for the sole employer per month and $4 per enrollee per month.

6. For qualified sole employers that have, at the time of the application, 51 or more enrollees, the payment shall be $115 for the sole employer per month and $4 per enrollee per month.

(D) The employer premium for an annual period shall normally include an agent or broker fee. However, such fees may be terminated commencing with the second year of enrollment for sole employers who made application to the program prior to July 1, 1996, and with the third year of enrollment for sole employers who applied on or after July 1, 1996 and had an effective date of coverage before July 1, 1997, if the sole employer's requalification request includes the employer's certification that an agent or broker provided neither of the following types of services:

1. Assist the sole employer in completing the requalification and/or assist the sole employer's enrollees with the open enrollment process pursuant to Section 2699.6139.

2. Assist the sole employer or enrollees in resolving enrollment, billing, claims or other program issues.

(6) The sole employer may redirect any payment made pursuant to this section to another agent or broker by submitting written notice signed by the employer to the program and providing the program with the information required under (a)(1) of this section. The effective date of the redirection shall be within ninety (90) calendar days following receipt of the notice.

(7) Payment to agents and brokers shall be terminated if one of the following occurs:

(A) The agent or broker is no longer a licensed agent or broker.

(B) The agent or broker materially violates any law or regulation regarding the sale of insurance or fails to comply with any court order.

(C) The agent or broker commits any willful or dishonest act resulting in injury to the program, a participating carrier, or an enrollee.

(8) For sole employers who apply on or after July 1, 1996, when agent or broker fees are terminated pursuant to (7)(A), (B) or (C) above within the first two years, the sole employer shall pay the equivalent monthly amount to the program as part of the program participation fee in accordance with Section 2699.6307, for the remainder of the first two years of enrollment.

(b) This subsection applies to sole employers who have an effective date of coverage on or after September 1, 1998 and sole employers who have made an election pursuant to Section 2699.6116.

(1) For sole employers who have an effective date of coverage on or after September 1, 1998 and sole employers who have made an election pursuant to Section 2699.6116, the amount of the agent or broker fee shall be an amount equal to eight percent of the comprehensive individual medical premium and comprehensive individual dental premium of each enrolling employee.

(2) If an insurance agent as defined in Section 31 of the Insurance Code or broker as defined in Section 33 of the Insurance Code assisted the sole employer in applying for the program, and if the sole employer is determined to be qualified as a result of the application, and the agent or broker requests such payment in writing as part of the application and includes his or her name, license number, tax identification number, and address, then the agent or broker fee shall be paid to the identified agent or broker.

(3) The sole employer may redirect any payment made pursuant to this section to another agent or broker by submitting a written notice signed by the employer to the program and providing the program with the information required under (2) of this section. The effective date of the redirection shall be within ninety (90) calendar days following receipt of the notice.

(4) Payment to agents and brokers shall be terminated if one of the following occurs:

(A) The agent or broker is no longer a licensed agent or broker.

(B) The agent or broker materially violates any law or regulation regarding the sale of insurance or fails to comply with any court order.

(C) The agent or broker commits any willful or dishonest act resulting in injury to the program, a participating carrier, or an enrollee.

(5) If the agent or broker fee is not directed to a particular agent or broker then the agent or broker fee shall be retained by the program as part of the program participation fee.

Cal. Code Regs. Tit. 10, § 2699.6194

1. Renumbering and amendment of former section 2699.628 to section 2699.6194 filed 5-27-94; operative 5-27-94 (Register 94, No. 21).
2. Amendment of subsections (a)(2)(B), (c)(2), new subsections (c)(2)(A)-(C), and amendment of subsection (d) filed 12-29-94 as an emergency; operative 12-29-94 (Register 94, No. 52). A Certificate of Compliance must be transmitted to OAL 4-28-95 or emergency language will be repealed by operation of law on the following day.
3. Certificate of Compliance as to 12-29-94 order including amendment of subsections (b)(1), (c)(2)(A) and (c)(2)(C) transmitted to OAL 4-12-95 and filed 5-22-95 (Register 95, No. 21).
4. Amendment filed 4-25-96; operative 5-25-96 (Register 96, No. 17).
5. Amendment of subsections (b)(1), (c)(2), and (d)(2) filed 5-5-97; operative 7-1-97 (Register 97, No. 19).
6. Amendment filed 6-3-97; operative 7-1-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 23).
7. Amendment filed 7-3-98 as an emergency; operative 7-3-98 (Register 98, No. 27). A Certificate of Compliance must be transmitted to OAL by 11-2-98 or emergency language will be repealed by operation of law on the following day.
8. Editorial correction of subsection (b)(3) (Register 98, No. 47).
9. Certificate of Compliance as to 7-3-98 order transmitted to OAL 10-2-98 and filed 11-16-98 (Register 98, No. 47).

Note: Authority cited: Section 10731, Insurance Code. Reference: Section 10731, Insurance Code.