Medicare Health Plan Commissions

​Medicare Health Plan Commissions

• ​First and foremost, you must be licensed, contracted, certified, and in ready-to-sell status prior to discussing a product and taking an application.
  
  
• Licensed only agent (LOA): If you are LOA your commissions are paid to an agency or upline.
  
  
• Independent agent: If you are an independent agent you own your book of business and commissions are paid directly to you by the carrier or your marketing upline.
  
  
• Rapid disenrollment compensation recovery:
  • In order to not be subject to rapid disenrollment compensation recovery, the newly enrolled Medicare beneficiary must remain enrolled with Carrier A into the fourth month, i.e. if the individual enrolled with Carrier A on January 1st, the individual must still be enrolled with Carrier A on April 1st of the same calendar year.
  • If a Medicare beneficiary enrolls with Carrier A in the fourth quarter of the year, and subsequently uses the annual election period to make changes to their plan for an effective date of January 1st of the following year then compensation recovery for that rapid disenrollment does not apply.
  • No recoupment, chargeback, refund or deduction shall be made if CMS guidance permits payment of commission for such rapid disenrollment with respect to the period that the Medicare Product enrollee was enrolled.
    
    
• Medicare Advantage Plan and Prescription Drug Plan initial enrollment commission: Half of your compensation is paid upfront, until CMS confirms it's a new to Medicare policy, at which point you are compensated for the other half.
  
  
• Medicare Advantage Plan and Prescription Drug Plan renewals: Most carriers have adopted the new CMS option to pay in monthly installments that total half of the original compensation amount annually.
  
  
• Medicare Advantage prorated commissions:
  • Medicare commission payments are now paid on a prorated basis. Any cases placed for effective dates after January 1st will be prorated. For example, an enrollment effective April 1st will generate a commission payment for 9/12ths of the standard commission because the member will only be enrolled for 9/12ths of that year. An enrollment effective September 1st will generate a payment of 3/12ths of the standard commission.
  • As a result, there are three ways commissions can pay out. There are always carrier exceptions to this rule.
    
    
• Medicare Supplement Insurance Plan commissions: Monthly compensation paid as the beneficiary pays the premium. Some carriers automatically pay advanced commissions on the first few months.
  
  
• Medicare Supplement Insurance Plan commission warnings:
  • If you re-write a Medicare Supplement to a new plan letter with the same carrier, the original agent will continue to receive compensation. In most circumstances, you will become the servicing agent on the account. In order to receive compensation, you must write the beneficiary with a new carrier.
  • If a beneficiary has a guaranteed issue right (not including open enrollment), the compensation is different (lower). Some remain on a percentage of the annualized premium, while others plan a one-time flat fee.
  • Check your commission schedules.
    
    
• The carriers shall perform periodic audits that may reflect positive or negative debits on your commission statements. It is always good practice to manage your book of business and track commissions on your end. We recommend an agency management system for this purpose. You can see all your business that we pay conveniently on our website anytime. Our commissions team is always here to further assist you.​
  

​The Medicare Offerings team is here to help with any additional questions you may have. Leave us a comment below, or contact us directly with your questions and concerns.