Fees in Lieu of Commission

[Yagents]

Saw this quote on AIS, anyone else carving out the commish besides Aetna? If you need help negotiating, hire Ken Feinberg.

[FONT=Verdana, Arial, Helvetica, sans-serif]Quote of the Day

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[FONT=Verdana, Arial, Helvetica, sans-serif]"Even though employers were paying [broker and agent] commissions in the past as part of the premium, when they see the percentage broken out [as some insurers might do under new medical loss ratio rules], will employers pay it? I think it might put a new burden on the agents. A lot of employers might be taken aback…but might say 'times are tough' and the employer might try to negotiate a lower commission…. In the past, that discussion didn't take place."[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]— Scott Leavitt, a broker in Boise, Idaho, and past president of the National Assn. of Health Underwriters, told [FONT=Verdana, Arial, Helvetica, sans-serif]AIS's HEALTH REFORM WEEK[/FONT].[/FONT]

 

[stuy119]

Here's the key - will carriers still collect the commission and forward it to us?

If so, there won't be much negotiating, because it would have to be part of each deal. Aetna, BCBS, UHC, etc. aren't going to have a slot on each deal coming through to put in your assigned % commission, then collect/pay out and just accept the admin costs that go along with that structure.

If they don't, and agents are responsible for collecting, then it gets interesting. More and more agents will be dropping off the grid, as they will then take on more admin issues than they do currently. Most insurance agents aren't the best business-people as it is, so adding in another function won't make their life any easier or better.

 

[ABC]

Here's the key - will carriers still collect the commission and forward it to us?

If so, there won't be much negotiating, because it would have to be part of each deal. Aetna, BCBS, UHC, etc. aren't going to have a slot on each deal coming through to put in your assigned % commission, then collect/pay out and just accept the admin costs that go along with that structure.

If they don't, and agents are responsible for collecting, then it gets interesting. More and more agents will be dropping off the grid, as they will then take on more admin issues than they do currently. Most insurance agents aren't the best business-people as it is, so adding in another function won't make their life any easier or better.

Good point.
We first must be able to sell our services. If the only thing you do is spread sheet at renewal you might have a tough sale.

The independent agent is going to have a huge advantage over a large agency in the group field.

If we have to collect the comp you will only want to do business with well managed companies.