Mandated ACA Commissions for 2017 ?

[Ann H]

I appreciate the gracious words spoken here. Leevena, Somarco, Kvnchris and others who do not have a large IFP book have been courteous towards those with a large IFP book who are facing a potential cliff. Personally, 80% of my income comes from group, but my heart goes out to those who do primarily IFP. I also recognize that my Group Insurance niche could evaporate with one tweak of the law. This industry is cyclical and brutal.

No telling what news we will hear in September/October 2016 about product availability and commissions, much less what the election cycle will bring! However, if there is only 1 carrier in your area, it could simplify your OEP immensely! That scenario is very likely in many states.

Then, year 2018 will probably be a new ballgame. So, if you can hold on to your book, and cross-sell in the off-season, and have other streams of revenue........ then you will probably reap another windfall when all of those people turn to whatever new market is available after this one falls.

I have often said that those agents who left in 2010 made a valid decision. The agents who stayed for the huge windfall also made a valid decision, even though they knew it would crash later. Only the tough can do that. And only the really tough can/will do it again when this market fails and another emerges.

 

[scagnt83]

Is there a problem if you give advice, and accept a gratuity as a concerned friend, instead of as an agent? A turning-65 client wants to pay me next week to help her decide if she should take this AARP-UHC Medicare Advantage plan, or a MedSup. If she takes MedAdv, I'm accepting the gratuity, cause I'm not certified on those. I'm licensed for MedSup, so the gratuity will be graciously declined if she goes that route. Sunday night, I'll be boning up on the disadvantages of Medicare Advantage..

AC this seems to be a state by state thing with regards to licensed agents charging a consulting fee. Check with the IL DOI for clarification.
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Bob is correct that this is very state specific. Im licensed in IL and have looked into this before there.

Illinois allows agents to charge a fee for consulting advice. However, you may not accept commissions or any other compensation (on the product you are giving advice about) if you are charging a fee.

Also, if an agent wants to charge a Consulting Fee. A Consulting Fee Agreement must be filed with and approved by the ILDOI. Any updates to that agreement must be re-approved by the ILDOI.

IL does not have a separate Consulting License, so you are good to go with your current license. Just draft a contract and get it approved.

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I doubt you can make it a condition that you will only help them if they buy a ancillary product.

You could just say that you help existing clients (maybe with 2 or more product with you) with their Health Insurance Enrollment as a complimentary service.

But in the context of calling on HI leads, that would likely be illegal. Its something that you would just have to do "as an extra" and tell people about more in passing and not as your main pitch.

But I do think that you could advertise for your insurance services in general and have that as part of your advertising.

 

[FLM2]

I know most people on here are suuuuper negative about this whole commission cut situation, probably because ya'll have been selling health many years longer than I have. But if commissions really do drop down to ZERO, nationwide, I would hope that lead costs go down significantly too. I would jump all over 50-75% cheaper leads and sell 0 commission health plans with ancillary like crazy.

I came into this industry 4 years ago right before the switch, and even back then my prior place of work (small brokerage) only paid me $10 a member ONE TIME. I had no idea how bad I was getting raped. The only way we made money was selling critical illness/life insurance/accident insurance policies. I'm pretty sure I could make a very easy six figure income off critical illness alone, now that I sell on my own and have much better contracts. Nothing will be worse than the realization I had 8 months ago when I finally called the carriers and asked what the actual pay is. I was the top health producer and during each open enrollment I averaged 200-250 members a month, cold calling a dialer and taking referrals. It's truly depressing looking back that I didn't get a single residual dollar from those policies. So honestly, I'm excited right now regardless. I feel I can make a shitload of money next open enrollment with or without health commissions. Just thought I'd share my perspective in here.

It's everyone's choice as to how they run their business but I would rather have root canal on a daily basis than hand over millions of dollars in premium to insurance companies that have no interest in paying me.

And, to mirror what others have said, ancillary sales have become far more difficult in this market than before.

 

[Yagents]

Also, if an agent wants to charge a Consulting Fee. A Consulting Fee Agreement must be filed with and approved by the ILDOI. Any updates to that agreement must be re-approved by the ILDOI.

AZ DOI also told me this would be required.......if even allowed.

 

[FLM2]

AZ DOI also told me this would be required.......if even allowed.

That whole concept is just a non-starter for agents, all it does it open potential liability in exchange for small fees that don't resolve the basic issues regarding the fair value for our services.

 

[scagnt83]

That whole concept is just a non-starter for agents, all it does it open potential liability in exchange for small fees that don't resolve the basic issues regarding the fair value for our services.

Why is that? This lets you set your own price and the consumer agrees that it is fair for the services received. Any good business owner is going to have a written agreement anyway if they are charging a client a fee. What is the big deal with filing it with the DOI? Do you not think that the majority of your clients would be willing to pay out of pocket what you would require for time spent? What is your average yearly comp from your typical client?

 

[Yagents]

I have succumbed to the fact that the only fee based model that would work would be an enrollment fee. Followed by a number of disclaimers stating everything after enrollment is out of your hands.

When you charge an annual fee, clients would expect you to deliver on that fee. When everything after enrollment is out of your hands, it sets you up for lawsuits.

Whether it's clients not getting bills, payments not being applied, erroneous cancellations, no medical cards, doctors end up not in network, wrong plan issued, aptc clawbacks, income documentation, healthcare.gov issues galore, and the inability for carriers to make corrections in timely fashion......it's set up for failure.

I wrote 450 policies in the 45 day o.e.p period, and it took me 90 days to clean up all the carrier issues, with some taking 3-4 calls to correct , and hours on the phone.

When you have no control over the situation, the fee based model is doomed to fail. If I paid a fee to someone, I expect results, and so would you.

I can control enrollment actions, but that's where it ends. Even Charging $250 for enrollment would still be a haircut of 40%, and a third of my clients or more would balk at that price.

 

[somarco]

450 policies in the 45 day o.e.p period, and it took me 90 days to clean up all the carrier issues

Roughly 5 months work to completely earn your paycheck. I can't imagine the headaches you had with this, which is why I bailed early in 2014. Couldn't deal with the carrier issues and clients who had always relied on me in the past to fix the problem.

Of course, prior to 2014 there really weren't any problems to fix. Biggest consistent challenge I had was Aetna failing to draft premiums on a timely basis. Just imagine a client calling about overdraft fee's because it took Aetna 4 months to draft the initial (and subsequent) premiums.

Never mind that my client apparently never balanced her checkbook during that time .....

You will bounce back. Just like me, you have changed direction more than once in your life. Difference is, all my changes were in the health insurance field.

I don't count the 8 months I sold siding and carpet. What a scam.

 

[scagnt83]

I have succumbed to the fact that the only fee based model that would work would be an enrollment fee. Followed by a number of disclaimers stating everything after enrollment is out of your hands.

When you charge an annual fee, clients would expect you to deliver on that fee. When everything after enrollment is out of your hands, it sets you up for lawsuits.

Whether it's clients not getting bills, payments not being applied, erroneous cancellations, no medical cards, doctors end up not in network, wrong plan issued, aptc clawbacks, income documentation, healthcare.gov issues galore, and the inability for carriers to make corrections in timely fashion......it's set up for failure.

I wrote 450 policies in the 45 day o.e.p period, and it took me 90 days to clean up all the carrier issues, with some taking 3-4 calls to correct , and hours on the phone.

When you have no control over the situation, the fee based model is doomed to fail. If I paid a fee to someone, I expect results, and so would you.

I can control enrollment actions, but that's where it ends. Even Charging $250 for enrollment would still be a haircut of 40%, and a third of my clients or more would balk at that price.

I wouldnt necessarily agree about the lawsuit part. Lawyers and CPAs give advice on issues all of the time when those issues have hoops to jump through after the advice is given.
As long as client expectations are properly managed then the situation is not much different (as long as similar disclosures are given). And if they have a question or need more guidance after the initial consult you could just charge an hourly rate.

But giving them the heads up and setting the expectation that "hey, you have a few hours minimum of phone calls to make after this initial enrollment... and I cant do it for you.", would just be part of the advice given. Its no different than when I sell a life policy and tell the client that they need to expect to schedule 1 hour for the paramed exam and 30min for the phone interview. If I dont tell them about that up front they are pissed, If I do tell them they are ok with it.

As far as what the Fee should/could be, a 40% haircut is not unreasonable (assuming a fair rate to begin with) if you are not doing the 90 days of work after the initial enrollment. And after 2 or 3 days of frustration with trying to get through to navigators or trying to decided which is right or what kind of subsidy they can get, id bet that $250 would not be an issue for a lot of people if you can get them enrolled in 1-3 hours.

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Dont get me wrong, I do think that people would not be happy in general with a fee based model. But that is the only viable solution moving forward it seems unless individual states mandate some small stipend to agents.

But I do not think that they would necessarily be pissed at the people giving them advice... as long as that advice highlights extensively that they will have to jump through all of the hoops themselves over the next 90 days. To be honest, that is one of the main things the people will need advice on. You list it out in detail for them what they have to do. You give them a checklist to take home. You give them pointers and tips from your experience, etc. etc.

Yes that 90 day period will be frustrating for them. But if you have given them guidance on how to navigate it easier, they will see you as an good guy and not a bad guy. They will see Ocare and the carriers as the ones who are inept.

 

[Yagents]

Billing at 15 minute increments would be a nightmare, and unproductive.

A lawyer or CPA is able to control the elements and provide a definitive black and white answer in most cases. We have neither.

you'll get your medical card n 1-2 weeks..........not
Your doctor is in network............not
You can keep your health plan.............not