Over 150.000 insurance professionals and consumers come to the Insurance Forum every month. Click here to register for FREE


Go Back   Insurance Forums > Insurance Agents and Brokers Forum > Senior Insurance Forum

Reply to CMS Changes Are Going to Lead to Commission Cuts for MAPD     
Old 12-19-2013, 09:24 PM   #1
Guru
 
Join Date: Jun 2011
Posts:375
State: Nikita is an Insurance Agent from Iowa
CMS Changes Are Going to Lead to Commission Cuts for MAPD CMS Changes Are Going to Lead to Commission Cuts for MAPD
Just heard tonight from my regional manager that due to some CMS changes, first year commissions for ALL advantage plans are going to be reduced. You will only get the entire first year commission if the plan is sold in January. After that commission will be pro-rated, i.e. a plan sold in July will receive only 6 months of first year commission and then starting Jan 1, the agent will receive monthly renewal rate (50% of first year commission)....So if you enroll someone with 12/1 effective date, you will receive 1 month of higher first year commission and then on 1/1 you will receive 50% of that rate (i.e. the renewal rate) for remaining commissions - so essentially losing almost one-half of first year commissions!
------------------------------------

Last edited by Nikita; 12-20-2013 at 08:29 AM. Reason: clarity
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-19-2013, 09:26 PM   #2
Guru
G.Gordon on CMS Changes Are Going to Lead to Commission Cuts for MAPD
 
Join Date: Oct 2008
Posts:3,181
State: G.Gordon is an Insurance Agent from Missouri
G.Gordon is a member of 1000 posts VIP club
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD
Some carriers already sort of do this, not a big deal. Why would you get full year comp on a plan sold in Sept.?

------------------------------------
No man has a good enough memory to be a successful liar.
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-19-2013, 09:46 PM   #3
Guru
 
Join Date: Sep 2006
Posts:6,205
State: sman is an Insurance Agent from Georgia
sman is a member of 5000 posts Super VIP club
CMS Changes Are Going to Lead to Commission Cuts for MAPD
Originally Posted by Nikita View Post
Just heard tonight from my regional manager that due to some CMS changes, first year commissions for ALL advantage plans are going to be reduced. You will only get the entire first year commission if the plan is sold in January. After that commission will be pro-rated, i.e. a plan sold in July will receive only 6 months of first year commission. Its going to be interesting.....
As Gordon said, some carriers are already doing this. Your subject line is misleading. Just because a carrier only pays you for the months a person is covered doesn't mean commissions are reduced.

If you wrote a person in June for a July effective date who is aging in and the carrier paid you the full $425, what do you think would happen if that person then switched plans during AEP? The carrier would ask for half of the commission back. Instead of doing it that way, the carriers are going to pay you for the 6 months the person would be covered and then you won't have a charge back.

It really isn't a big deal.
------------------------------------
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-19-2013, 10:44 PM   #4
Guru
 
Join Date: Jun 2011
Posts:375
State: Nikita is an Insurance Agent from Iowa
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD Nikita is the thread starter for: CMS Changes Are Going to Lead to Commission Cuts for MAPD

Originally Posted by sman View Post
As Gordon said, some carriers are already doing this. Your subject line is misleading. Just because a carrier only pays you for the months a person is covered doesn't mean commissions are reduced.

If you wrote a person in June for a July effective date who is aging in and the carrier paid you the full $425, what do you think would happen if that person then switched plans during AEP? The carrier would ask for half of the commission back. Instead of doing it that way, the carriers are going to pay you for the 6 months the person would be covered and then you won't have a charge back.

It really isn't a big deal.
I don't think you understand what I am saying. With this change, you will NOT be paid for all the months that a person is covered during their first year of enrollment. If you enroll someone who is turning 65 in December, and their effective date is 12/1, you will only get 1/12 of the first year commission. So instead of getting $425, you will get 1/12 of that amount. YES I do think that is a big deal!!

Secondly, you're assuming most people switch plans during AEP. My experience is that most people don't. So for the vast majority, this will not be the case. So if they stick with the plan they were enrolled in, why would you not expect to be paid a full 12 months of the higher first year commission before starting in with the reduced renewal amount beginning on their anniversary date?
------------------------------------

Last edited by Nikita; 12-19-2013 at 11:27 PM. Reason: correction
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-19-2013, 11:24 PM   #5
Guru
 
Join Date: Oct 2009
Posts:382
State: SecureHealth1 is an Insurance Agent from Florida
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD
I think that new rule only applies to years 2-10 on renewals, not new to Medicare year 1?
------------------------------------
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-19-2013, 11:58 PM   #6
Guru
 
Join Date: Jun 2011
Posts:375
State: Nikita is an Insurance Agent from Iowa
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD Nikita is the thread starter for: CMS Changes Are Going to Lead to Commission Cuts for MAPD

Originally Posted by SecureHealth1 View Post
I think that new rule only applies to years 2-10 on renewals, not new to Medicare year 1?
According to what my manager told me tonight, and I HOPE she is wrong, but she said that it applies to first year commissions....
------------------------------------
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-20-2013, 04:25 AM   #7
Guru
kennethbroyles on CMS Changes Are Going to Lead to Commission Cuts for MAPD
 
Join Date: Oct 2007
Posts:285
State: kennethbroyles is an Insurance Agent from Undisclosed Location
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD
Craig Ritter.... where are you? What are you hearing?
------------------------------------
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-20-2013, 06:24 AM   #8
Guru
 
Join Date: Jun 2010
Posts:1,534
State: wehotex is an Insurance Agent from Texas
wehotex is a member of 1000 posts VIP club
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD
Originally Posted by sman View Post
As Gordon said, some carriers are already doing this. Your subject line is misleading. Just because a carrier only pays you for the months a person is covered doesn't mean commissions are reduced.

If you wrote a person in June for a July effective date who is aging in and the carrier paid you the full $425, what do you think would happen if that person then switched plans during AEP? The carrier would ask for half of the commission back. Instead of doing it that way, the carriers are going to pay you for the 6 months the person would be covered and then you won't have a charge back.

It really isn't a big deal.
Says you. It's matter of maintaining a positive cash flow. If you sell an Oct eff, you'll only get $51.75 (17.25 x 3 mos). This sucks when you have bills to pay for some and even harder for newbies to succeed at it with not many renewals coming in to soften the blow. It's ALWAYS better to have the $$ now rather than later.
------------------------------------
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-20-2013, 07:02 AM   #9
Guru
G.Gordon on CMS Changes Are Going to Lead to Commission Cuts for MAPD
 
Join Date: Oct 2008
Posts:3,181
State: G.Gordon is an Insurance Agent from Missouri
G.Gordon is a member of 1000 posts VIP club
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD
Originally Posted by Nikita View Post
I don't think you understand what I am saying. With this change, you will NOT be paid for all the months that a person is covered during their first year of enrollment. If you enroll someone who is turning 65 in December, and their effective date is 12/1, you will only get 1/12 of the first year commission. So instead of getting $425, you will get 1/12 of that amount. YES I do think that is a big deal!!

Secondly, you're assuming most people switch plans during AEP. My experience is that most people don't. So for the vast majority, this will not be the case. So if they stick with the plan they were enrolled in, why would you not expect to be paid a full 12 months of the higher first year commission before starting in with the reduced renewal amount beginning on their anniversary date?
You are assuming that in your example of a December effective enrollment that it will start at the reduced rate. in January Over the course of the 1st 12 months of enrollment, if the person stays with the same plan, you end up with the same money, just not advanced. Coventry has done this, it works out to be the same money. Yep, if you're expecting the full comm at the end of the year it could be tight on a new person to the business.

------------------------------------
No man has a good enough memory to be a successful liar.
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Old 12-20-2013, 08:14 AM   #10
Guru
 
Join Date: Jun 2011
Posts:375
State: Nikita is an Insurance Agent from Iowa
CMS Changes Are Going to Lead to Commission Cuts for MAPD Re: CMS Changes Are Going to Lead to Commission Cuts for MAPD Nikita is the thread starter for: CMS Changes Are Going to Lead to Commission Cuts for MAPD

Originally Posted by G.Gordon View Post
You are assuming that in your example of a December effective enrollment that it will start at the reduced rate. in January Over the course of the 1st 12 months of enrollment, if the person stays with the same plan, you end up with the same money, just not advanced. Coventry has done this, it works out to be the same money. Yep, if you're expecting the full comm at the end of the year it could be tight on a new person to the business.
GGordon, I don't understand your math or your last posting. The monthly commission rate for the first year is TWICE what the monthly rate is for the renewal. So, for example, with the person whose effective date is 12/1, the agent receives one month at the higher rate, and 11 months at 50% of that rate, and you're saying that it all works out the same? I didn't assume that starting January 1, the commission will be at the reduced rate, this is what my manager told me would be happening....that starting in January, all commissions are paid at the renewal rate unless it is a new enrollment for January.
------------------------------------

Last edited by Nikita; 12-20-2013 at 08:33 AM. Reason: clarity
  Reply With Quote to CMS Changes Are Going to Lead to Commission Cuts for MAPD
Reply to CMS Changes Are Going to Lead to Commission Cuts for MAPD 

  Insurance Agent Forum > Insurance Forums > Insurance Agents and Brokers Forum > Senior Insurance Forum




Similar Threads with CMS Changes Are Going to Lead to Commission Cuts for MAPD
Thread Thread Starter Forum Replies Last Post
Thinking of Starting a Lead Company jaugusta Insurance Leads 54 09-06-2016 02:15 PM
CMS IEP Commission Approval MajesticTalent Senior Insurance Forum 3 04-26-2011 02:27 PM
Anthem Joins the Party on Commission Cuts in VA.... dgoldenz Health Insurance and Ancillary Benefits 3 01-21-2011 12:47 PM
NY Times About Teacher Cuts wfdevereaux Insurance Leads 0 04-21-2010 10:29 AM
Know Any Lead Co's that Work on Commission? 2112Greg General Insurance Agent Discussions 15 06-06-2008 10:51 PM



All times are GMT -5. The time now is 09:47 AM.

Forum enabled with vBulletin®
Copyright ©2000 - 2017, vBulletin Solutions, Inc.


Join the Forum - It's FREE

Share This Page



Weekly Poll

Where do we go from here? POLL
Nothing - No ACA fixes - status quo
29.82 %
HHS Rulings and band aid bills
17.54 %
Hail Mary repeal and/or replace bill
17.54 %
A bipartisan bill to fix ACA
35.09 %

Voters: 57. This poll is closed