Mar 11 2014
An Interview with Chuck Campbell
PPACA is changing our industry significantly. While healthcare reform can provide great economic opportunity for BCBS agents, it will likely increase the risk and frequency of issues and liability claims. For over 15 years, BCS has offered an Errors and Omissions program to BCBS independent agents. We recently interviewed Chuck Campbell, Vice President–Agency Sales, Blue Cross Blue Shield of South Carolina on the role Agent E&O plays in his risk management program.
BCS Financial: Chuck, can you tell us how many years have you have been with BCBSSC and what your responsibilities are?
Chuck Campbell: I have been with the Plan for 20 years. I’m responsible for all agent driven product sales and retention efforts for groups of 2-100 lives, plus all individual products including U65, Medicare Supplements, Medicare Advantage and Part D, and Short Term Health. Additionally, we market and sell a host of ancillary products to attach to our group offerings.
BCS: I’m sure you’ve spent a good deal of time analyzing the risk impact of PPACA on your Plan, but it must also present new challenges for your agents.
CC: Absolutely. It seems to me that the health insurance market has never before been faced with such complexity. Agents must deal with the challenges of navigating clients through this new world. Agents need to understand the regulations and help their customers make appropriate decisions. The Insurance Exchanges are new marketplaces for individuals and small businesses. Agents must be knowledgeable and have strong communication skills to help their customers understand their options.
BCS: Tell us about your agent oversight in the changing healthcare world.
CC: Well, we have always been diligent with agent oversight. All of our agents have background checks, vector one and go through the appropriate licensing procedures. We monitor them closely and if there are any DOI complaints, license issues or liability claims, we are typically notified. One of the most important features of our agent oversight is that we require all agents and agencies to maintain at least $1,000,000 in Errors and Omissions coverage. From our perspective Agent E&O coverage provides a layer of liability protection for all parties involved: our customers, our agents and the Plan.
BCS: BCBSSC has sponsored BCS’s Agent E&O program for a number of years. Can you tell us the background?
CC: This program started in 2006. It has been a very successful value added benefit for our agents. We are pleased that we can make a cost effective option that has quality coverage available to our agents. And we’re pleased to be one of the top Blue plans nationally in agent enrollment in the BCS program administered by MGA.
BCS: Many carriers have the requirement but only confirm coverage at the time of original appointment. From what we hear, confirming coverage on an annual basis is an administrative headache.
CC: Well, I can confirm that it does present an administrative challenge. But the good news is that we partner with the BCBS E&O plan administrator MGA Insurance Services to assist our annual enforcement. MGA manages the entire process from sending notifications 90 days ahead of the E&O renewal to collecting and confirming credible coverage. We work closely with them through a weekly web-based reporting process.
BCS: Is the agent E&O requirement an outcome of healthcare reform or have you always had that requirement in your contracts?
CC: We have strongly supported having an E&O insurance requirement for many years. BCBSSC distributes products through hundreds of independent agents. Because the agents are contractors, there is an inherent exposure to the Plan that is outside of the Plan’s control. If agents are negligent, they should be held accountable and the loss should be applied to the appropriate policy. And with all of the changes in healthcare and the movement to more independence among agents, I can’t imagine a Healthcare insurer not requiring E&O coverage.
BCS: Do you see the role of agents as changing?
CC: The role of agents appears to be changing from pure product salesperson to being more of an advisor/consultant. As I mentioned before, there has never more complexity to the sales process. We believe that Agent education and training is critically important. But as we move through 2014 and as agents assist clients with the decision making process, the agents will certainly have increased potential for issues that could lead to claims.
BCS: Thank you, Chuck, for sharing your perspectives on Agent E&O insurance.