I just received the 2011 commission schedule for Humana's Small Group Medical products, and the bottom line effect will be pretty much "no change". However, the formula for calculating commissions has changed, as they are now using tiers 1, 2, or 3 based on in-force volume of business. They are adjusting your "tier" quarterly according to in-force volume.
If you've sold Humana before, you'd recognize this structure from their previous bonus schedules. Basically I fall in tier 3 with more than 35 "ELC's" which is Eligible Lines of Coverage. Group medical counts as 1 ELC, dental as 1/2, and there's a 1/4 ELC given to life, voluntary life, vision, LTD, STD, and critical illness. Tier 1 is 8 or less ELC's, Tier 2 is 9-34 ELC's, and Tier 3 is 35+ ELC's.
Besides the "tiers", they also have different commission percentages by size of group, segregated into 2-3 enrolled subscribers, 4-25, 26-50 and 51-99.
I have to consider that the volume of business I place with a carrier may change. I'm in Tier 3 now, but even if I was in Tier 2 the commission percentage is pretty much the same in 2011 as it is in 2010.
Most of my groups range in size of 4-25 employees, and I get 6% now, and will get 6.25% in tier 3 or 6% in tier 2. The renewal commission goes down a quarter of a percentage point no matter what tier and what group size.
I should have said, "no change" for my situation, because I fall into tier 3 and most of my group sizes are 4-25 enrolled employees. However, there are greater changes at other levels. Group sizes of 26-50 hurt a little with tier 2 going to 5.50% and tier 3 going to 5.75%, and 51-99 size groups hurt a lot with tier 2 going to 3.75% and tier 3 going to 4.25%. It's group sizes 2-3 that get slashed to 3% in tier 2 and 3.5% in tier 3. Come to think of it, I have a group in size 2-4, so I guess I'll get hit there. But, hey, some other carriers have done that recently to the very small group sizes.
I've read this forum for quite some time, but just now signed up to share this information. Thanks, guys, for all the valuable information you have shared along the way.
If you've sold Humana before, you'd recognize this structure from their previous bonus schedules. Basically I fall in tier 3 with more than 35 "ELC's" which is Eligible Lines of Coverage. Group medical counts as 1 ELC, dental as 1/2, and there's a 1/4 ELC given to life, voluntary life, vision, LTD, STD, and critical illness. Tier 1 is 8 or less ELC's, Tier 2 is 9-34 ELC's, and Tier 3 is 35+ ELC's.
Besides the "tiers", they also have different commission percentages by size of group, segregated into 2-3 enrolled subscribers, 4-25, 26-50 and 51-99.
I have to consider that the volume of business I place with a carrier may change. I'm in Tier 3 now, but even if I was in Tier 2 the commission percentage is pretty much the same in 2011 as it is in 2010.
Most of my groups range in size of 4-25 employees, and I get 6% now, and will get 6.25% in tier 3 or 6% in tier 2. The renewal commission goes down a quarter of a percentage point no matter what tier and what group size.
I should have said, "no change" for my situation, because I fall into tier 3 and most of my group sizes are 4-25 enrolled employees. However, there are greater changes at other levels. Group sizes of 26-50 hurt a little with tier 2 going to 5.50% and tier 3 going to 5.75%, and 51-99 size groups hurt a lot with tier 2 going to 3.75% and tier 3 going to 4.25%. It's group sizes 2-3 that get slashed to 3% in tier 2 and 3.5% in tier 3. Come to think of it, I have a group in size 2-4, so I guess I'll get hit there. But, hey, some other carriers have done that recently to the very small group sizes.
I've read this forum for quite some time, but just now signed up to share this information. Thanks, guys, for all the valuable information you have shared along the way.
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