Health insurance agents earn commissions from the sale of health insurance policies. Over time, renewal commissions build up and provide an independent agent a “base salary” which provides for his or her monetary needs to pay mortgages, car payments, education for their children, living expenses, etc. And, renewal commissions on health policies are low, unlike the upfront first year commission paid by carriers to incentivize independent producers to bring in new business.
With ObamaCare, indepedendent health insurance agents will be cast aside. No longer will carriers be able to pay commissions and remain within the Minimum Loss Ratio requirement effective January 2011.
In a November 2010 Agent Compensation Statement, a major A+ Carrier put the following notice to their health insurance agents:
“Beginning 11-15-10 any commission transactions for major medical policies with effective dates of 1-1-2011 and after will be held. Commissions on all other lines will not be held and will process normally.”