Holy Smoke! Insurance brokers can do much better with this compensation schedule ……………up to +3.5% better than current average commission levels……………………………
Third Party Administrator Announces Broker Bonus Program
Touted as a Preferred Partner program, brokers earn a bonus when they sell groups with an effective date on or before January 1, 2021.
Brokers moving their book of business will earn more than average post ACA average commission levels.
Since the ACA broker commissions have eroded. In some cases a few major carriers have discontinued paying brokerage commissions for groups of less than 100 employee altogether. Those continuing to do so pay between 4-6%, down from the 15% level commission we used to earn on multiple employer trusts back in the day (the 1980’s were the golden years for health insurance brokers with many becoming millionaires).
Good news for health insurance brokers – happy days are here again………………………….
Here is the commission schedule brokers can earn through an aggressive TPA:
Per employee per month compensation:
$30 per enrolled
Promotional bonus:
Enrolled Employees Bonus Amount
250 $25,000
500 $50,000
1,000 $125,000
1,500 $200,000
Here’s an example of how the program works:
If you sell two groups, each with 300 enrolled employees, you will receive credit for 600 total enrollees and earn a $50,000 one-time bonus, plus $30.00 per enrolled employee per month for a total of $266,000 in the first year!
Insurance companies and TPA’s main distribution channel is through the brokerage community. They compete for brokers and tie loyalty to compensation levels including renewal bonus arrangements as a client retention tool. As an added built in “broker loyalty” factor, carriers always include a 30 day termination clause with or without cause in their brokerage contracts. A disloyal broker can have 100% of this compensation evaporate with a 30 day notice if he moves business somewhere else. We’ve seen that happen.
Additional details:
- The bonus program applies to new groups. It does not apply to any groups currently enrolled
- Enrolled employees is defined as the total number of employees enrolled in the plan. The total number of enrolled employees is measured at the time of the plan’s effective date.
- Only groups with an effective date between November 1, 2020 and January 1, 2021 will qualify for this compensation and bonus structure.
- Bonuses will be paid within 45 days of the group’s effective date.
- General agents are not eligible for this bonus.
FROM OUR BLOG:
BCBS To Pay $50,000 Broker Sales Incentive Each Fully Insured Group Sold
