Nevada’s Obamacare exchange isn’t paying insurance brokers commissions for plans they sold on through the health-care website, according to a class action lawsuit.
Six Nevada insurance brokers have filed the lawsuit in a Nevada district court, seeking damages from the Silver State Health Insurance Exchange and its (now former) contractor Xerox, the Las Vegas Review-Journal reports.
The filing claims that the exchange and Xerox “caused unnecessary delays in the payments of commissions to brokers and agents” and didn’t provide necessary broker information to insurance companies.
“Brokers are very reliant on their source of income every 30 days,” said attorney Matt Callister, who is representing the six brokers. “It’s a whole secondary crisis here. Some of these people are going to be bankrupt.”
Callister is also litigating another class-action lawsuit against the beleaguered state Obamacare exchange and Xerox, on behalf of customers whose coverage was delayed due to the website’s ongoing glitches.
“It makes life extremely difficult when you don’t get paid after working very hard,” said insurance agent Dwight Mazzone, who is taking part in the lawsuit.
Insurers are supposed to pay insurance brokers commissions after customers pay for coverage. The Nevada exchange and its former lead contractor Xerox, however, have struggled to identify what customers have paid their coverage. (RELATED: Woman Suing Obamacare Exchange Dies)
The exchange will be moving to HealthCare.gov in 2015 while it attempts to repair its Obamacare systems. It’s faced numerous complaints from customers who reported that they’d purchased insurance and paid premiums, but their insurance companies had no record of their coverage. (RELATED: Report: Nevada Obamacare Exchange Considered Dumping All Customers)
Nevada resident Larry Basich purchased coverage on the exchange and paid several months of premiums when he suffered a heart attack and had to deal with a long hospital stay — but due to glitches in Xerox’s system, his insurer denied his claim anyway, sticking him with a $400,000 bill. Basich is taking part in the class action lawsuit already pending against the exchange.
The exchange has not commented on the latest lawsuit.
Nevada isn’t the only Obamacare exchange failing to pay its insurance brokers. The Washington Post reported in July that insurance brokers working with the District of Columbia Obamacare exchange haven’t not been paid their commissions either. (RELATED: DC Obamacare Exchange Still Hasn’t Paid Its Insurance Brokers For Sign-ups)