Peak Advisors discontinuing sales of Individual Health Insurance

After a lot of discussion and decision making, Peak Advisors is discontinuing sales of Individual Health Insurance effective immediately.

While the individual market started out as a vibrant marketplace with many insurance carriers and plans being offered, it has slowly but surely seen the exit of most of the major health insurance carriers in the region and it has become increasingly difficult to manage this book of business. NYS Department of Financial Services Insurance Circular Letter No. 15 (2011) explains that all insurance carriers in NY MUST return at least 82% of premiums they receive back to insureds in the form of claims. This is called the Medical Loss Ratio (MLR). That leaves a very small margin to conduct business where only 18% of premium can be used towards salaries, rent, compliance, claims processing, and all other costs that go into running a business. Most, if not all, individual health insurance carriers run at a loss in this market, which has caused a steady decline in available carriers. To slow the enrollment in these plans, most carriers have stopped working with brokers as they do not want to further promote enrollment in plans they are losing money in. This has ultimately affected how we can do business in this market and is the reason for our decision today.

While we will continue to service in force policies up to the end of 2018, we will no longer work on renewals, provide advice, nor sign up new clients as of 9/1/2018.

It is clear that the individual health insurance market is not only a challenge for us, but for the numerous individual carriers who have come and gone from this market. We hope that NY DFS might change its opposition to association health plans that might help individuals to combine their numbers to help bring down rates in the future. Until that time we, like so many other brokers and insurance carriers alike, cannot continue to provide services only to lose money in providing those services.

We thank you for your prior business and wish you the best in the years to come.