Thanks to everyone for the comments! I hope everyone had a great year in 2008 and that you enjoy the Holiday Season! I’ll be celebrating Christmas with my family here in Harrisburg and then traveling to Atlanta to spend time with my wife’s family. I’ll be back in after the first of the year.
Regarding the CMS guidance on commissions, here is what I know: Nationally (with the exception states below), the maximum commission a health plan can pay a writing agent is $200 when replacing another Medicare Advantage plan. If you are replacing “Original Medicare”, then the maximum is $200 which will be paid initially and another $200 when CMS notifies the health plan that they are allowed to release the other $200 ($400 total and we’re guessing it will take 3-6 months for CMS to do this).
There are 4 states plus the District of Columbia which are slightly higher (I don’t have information on any others at this point):
- The following states allow $225 for replacing Medicare Advantage and an additional $225 for replacing Original Medicare (or for those new to Medicare):
- Pennsylvania
- New Jersey
- Connecticut
- District of Columbia
- The following state allows $250 for replacing Medicare Advantage and an additional $250 for replacing Original Medicare (or for those new to Medicare).
- California
- All other states will be $400/$200
From what I’ve seen thus far, the companies who have commissions in excess of the above commissions will have to reduce their commissions to the maximum. This will be retroactive to cover ALL 1/1/09 applications written. I don’t believe those companies who are BELOW the maximum will be allowed to raise their commissions, at least I haven’t seen any plan successfully do it.
EXCELLENT!!!
That’s what we need, people doing more than just posting on a web page. I’m with you (In spirit – I don’t know where you are).
I’ve been in touch with my congressperson – Joe Sestak (D)
Let’s us know what happens.
I am going to my congressman’s office to see if we can set up a meeting in my area between him and the area independent agents. We need to ban together to get this resolved. The way I see it, is that someone owes me one half to two thirds of my money and I want it back!
Sure this is one possibility. Wouldn’t that be special, no product line but we still have to keep the Sales Appt Confirmation forms for 10 years… I believe there will be a future for MAs although it may be different and I believe that future is still being formulated and has not been decided yet.
Check this out! I have seen this coming for a while as there were hints during the campaign. Six months ago I would have said no way can’t happen but we have seen many things that are unprecedented in the last few months.
We may not have to worry about commissions next year, it’s a possibility there will be no Advantage Plans as we now know them.
http://www.floridahealthnews.org/index.cfm/go/public.articleView/article/10379/top/true
Beyond the commission issue – I think that the form used to change Med Supp – where the client signs that the change is for better benefits or lower premium would have solved the entire issue of rolling clients. CMS impemented thsi form for supplements for the same reasons they are cutting our commissions on Advantage and PDP.
It is crazy for CMS to have the last month and a half for annual enrollment. Wouldn’t it make more sense (if it has to be a month and a half) to have it start October 1 and go through November 15. There are no major holidays during this time, people aren’t usually traveling, etc. AND – that
would give Medicare a month and a half to get their part done – confirm enrollments BEFORE they go into effect on January 1. OEP could run from December to end of March, or be left the same.
CMS really does need to quit making changes after AEP starts. Everyone – Agents, Ins. cos., SHIP,SHICK, etc. needs to know what is going on BEFORE the selling season starts. New rules shouldn’t affect the current season after it starts.
Teresa:
I had the same thing happen to me with Coventry. I had a debit balance for 27 enrollments at $170 each. I talked with someone in Broker Services and she didn’t understand it either. I gave up trying to figure it out. My advice is to make sure you keep all your statements and enrollment forms and keep detailed records on whom you got paid on and who you didn’t. They send out emails and also a hard copy through the mail that lists the actual names of who you enrolled.
Thanks Craig.
Brenda:
If you are replacing MA, the company is allowed to advance. They aren’t required to, but most will.
Mike:
My understanding of the “initial commission” payout is that it is for anyone coming off of Original Medicare (regardless of their age) and also for “New to Medicare”.
Also, here is the CMS press release on agent compensation from November of 2008.
http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=3353
And just like Tom said above, it is amazing to me the compliance and zero tolerance rules that are out there for the agent and that everyone are spending all their time on, yet it seems that CMS can not meet deadlines, not know terms, not worry if they make a mistake, etc. I have a novel idea, instead of companies having to issue daily reg change memos, what about devoting their time to product training, beneficiary communications, customer service training, etc.
Here is a snippet that shows that they call the AEP, the OEP, etc. and it ends with the rule resolving any confusion. That is all that I am seeing and feeling is confusion…
“The steps we are taking should help to make sure that brokers and agents are selling health or drug plans that best meet beneficiaries’ needs when open enrollment begins on November 15,” said CMS Acting Administrator Kerry Weems. “The rule we are issuing will help to resolve any confusion about how the private plans should implement compensation structures to meet those needs.”
Independent agents worked the entire AEP not knowing comps and still not knowing comps and I will bet that there were probably more changes this AEP than in the past due to the large changes in benefits and premiums on most plans this season.