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How does a broker or insurance agent make money from a Section 125 Cafeteria Plan? The funds aren't invested (as with a retirement plan) so how does one profit?
Or do they profit from the same clients other plans, Health coverage, retirement, etc.
Cafeteria plans specifically section 125's are typical group plans with non-discriminatory provisions built-in. Whenevery you sell a group health plan the carrier will pay a precentage of premium, just like an individual plan, however the commission structure is much lower (ie) for instance 5 to 50 cover lives 7%, 50 to 100 coverd lives 5%, and so on.
Understand that premium rates are going to run in the thousands per month, you should still come away with a nice commission. Plus group clients are gauranteed insurability unlike individual, it's always worth it to go after group accounts.
You might want to reread the original question. The OP was not asking about commission on an insurance product but on money that flows through a section 125 plan into reimbursment accounts.
if your setting up a group w/ a 125 plan, and you do it right the $$ that flows through the 125 should be going straight into some policy that you are the agent on, therefore getting your compensation.
I understand what your saying but I believe the OP was asking about accounts for things like medical reiumbusment, dependent child care...FSA type things.
You might want to reread the original question. The OP was not asking about commission on an insurance product but on money that flows through a section 125 plan into reimbursment accounts.
Better have a good TPA partner in that case! Or negotiate a 5% charge on all the money going through the 125 lmao.....I write up either a very simple 125 (POP ONLY) with an HSA contribution for those who can get their heads around it or I use a more comprehensive tpa so I don't have to mess with it but take a cut of the monthly charge per EE that enrolls from the tpa.