For those of you who have not read the CMS rules on Compensation, here are the last 4 paragraphs. As you can see it is complicated for the companies. If they paid you $200 commission for a new MAPD, then they would have to commit to paying $100 a year for the next 5 renewal years, for a total of $700. That has to be one of the things they are wrestling with.
An agent’s aggregate first year compensation can not exceed 200 percent of the aggregate compensation in each individual subsequent renewal year, of which there must be a total of five renewal years. (This creates a six-year cycle.) This means that in the first year, the compensation paid can be no more than 200 percent of the compensation paid in the second year or any individual subsequent renewal year up to a total of five renewal years (six year total compensation cycle). The agent will receive renewal compensation for the five year renewal period (years two through six) as long as the member remains enrolled in the plan or enrolled by the agent in a like replacement plan.
•
Compensation is earned in months 4 through 12 of the enrollment year as long as the member is active with the plan. If an enrollee leaves the plan prior to month 4, no compensation is earned. If an enrollee leaves the plan after month 3, compensation is paid on a pro-rated basis for the months in which the enrollee actually was a member of the plan.
•
After the 2009 baseline year, no entity may provide, and no agent or broker may receive, compensation greater than the renewal compensation payable by the replacing plan on renewal policies if an existing policy is replaced with a like plan type during the first year and 5 renewal years. “Like plan type” refers to PDP, MA or MA-PD, or Cost plan. Examples of replacements with like plan type are—PDP replace with another PDP, MA or MA-PD replaced with another MA or MA-PD, and cost plan replaced with another cost plan. If a PDP is added to an MA-only plan, then a new commission is paid for enrollment in the PDP.
•
Plans must establish a compensation structure for new and replacement enrollments and renewals effective in a given plan year. Plans may not alter the compensation structure during the given plan year. Compensation structures must be in place by the beginning of the plan year marketing period, October 1, and must be available upon CMS request including for audits, investigations, and to resolve complaints.
- - - - - - - - - - - - - - - - - -
And the compensation will be delayed for a week. This is from CMS
CMS is reviewing our guidance regarding the payment of compensation in the first year (2009) and working with the industry to determine what ifany changes we can make to continue to reduce churning in 2009. As a result, CMS is deferring the establishment of compensation structures by
October 1, 2008, for 1 week.
An agent’s aggregate first year compensation can not exceed 200 percent of the aggregate compensation in each individual subsequent renewal year, of which there must be a total of five renewal years. (This creates a six-year cycle.) This means that in the first year, the compensation paid can be no more than 200 percent of the compensation paid in the second year or any individual subsequent renewal year up to a total of five renewal years (six year total compensation cycle). The agent will receive renewal compensation for the five year renewal period (years two through six) as long as the member remains enrolled in the plan or enrolled by the agent in a like replacement plan.
•
Compensation is earned in months 4 through 12 of the enrollment year as long as the member is active with the plan. If an enrollee leaves the plan prior to month 4, no compensation is earned. If an enrollee leaves the plan after month 3, compensation is paid on a pro-rated basis for the months in which the enrollee actually was a member of the plan.
•
After the 2009 baseline year, no entity may provide, and no agent or broker may receive, compensation greater than the renewal compensation payable by the replacing plan on renewal policies if an existing policy is replaced with a like plan type during the first year and 5 renewal years. “Like plan type” refers to PDP, MA or MA-PD, or Cost plan. Examples of replacements with like plan type are—PDP replace with another PDP, MA or MA-PD replaced with another MA or MA-PD, and cost plan replaced with another cost plan. If a PDP is added to an MA-only plan, then a new commission is paid for enrollment in the PDP.
•
Plans must establish a compensation structure for new and replacement enrollments and renewals effective in a given plan year. Plans may not alter the compensation structure during the given plan year. Compensation structures must be in place by the beginning of the plan year marketing period, October 1, and must be available upon CMS request including for audits, investigations, and to resolve complaints.
- - - - - - - - - - - - - - - - - -
And the compensation will be delayed for a week. This is from CMS
CMS is reviewing our guidance regarding the payment of compensation in the first year (2009) and working with the industry to determine what ifany changes we can make to continue to reduce churning in 2009. As a result, CMS is deferring the establishment of compensation structures by
October 1, 2008, for 1 week.
Last edited:
is that we will see first year around $400 and renewals $200.
