Obamacare and Commissions-Here It Is!

[timsip]

Okay, I know it's late and I took the family out boating and had a couple of Pina Coladas with Rum Floaties (it's something we learned in Jamaica) so forgive me if I am dense at this hour. To make this simple, carriers can offer IFP plans on and off the exchange for anyone to choose from regardless of income that will prevent them from being assessed a penalty/tax at the end of the year. Am I correct so far?

If I am correct, the plans off the exchange do not have to be identical to the plans on the exchange, but they can have identical plans both on and off the exchange. Right?

 

[RayNY]

Right.

Plans ON the exchange must be offered OFF the exchange.
Plans OFF the exchange are not required to be offered in the exchange.

Regardless of income, citizens may acquire healthcare through either source. If you qualify for a subsidy, it will only be available through the official exchange, or a web broker (as per recent CMS guidlines, released around May 1st. It is not 100% confirmed, but seems legit. In the background, the subsidy does come from the official exchange, but through the web-broker portal.)

 

[joshpeck247]

Ok information starting to leak out, but here is what I have found out in Missouri so far.

Assurant- The won't be on the exhange and aren't a big player in Missouri anyway. They have instructed me that they will be on the exchange next year. For now they have no intentions of changing their commissions at all. They aren't competitive in Missouri, but they will have very strong commissions and if they are semi competitive then you will make some good money with these guys. You will mostly want to sell their Health Access product.

Cox Health Plans-I can't tell you exactly what they are planning, but there is a spin involved. They currently pay agents 10% and have instructed that they will keep the same commissions which is not true because they are going to do a per member per month commission schedule. If they kept the same 10% then that would equate to 24 per member per month. I believe they will go with a $16 per month per member which equates to roughly 6.5%. Can't tell you how I know that They don't know if they will be on the exchange, but all signs point to yes.

Coventry-Look for a hybrid plan-They will be doing a combo per member and percentage based program. My organization sells the most individual Coventry in both Missouri and Kansas so we believe the combo will be geared toward overrides for GA's like ourselves. I should know within the week what the commission rates will be. They will be on the exchange.

UHC-Here's the fun one. We currently get 16% with these guys. At first they had stated they would keep the same percentage now they are waiving. I anticipate that they will keep a percentage base, but it will go down. By how much I am not sure, but if they come out strong then they will be the carrier to sell. I don't believe they will be on the Missouri exchange, but as they indicated they are waiting for the Co-ops to peter out in 2016 when they no longer get their govt funding. Look for UHC to swoop in and take away some easy business in 2016.

Companies to avoid-Anthem and any Blue Cross initiative. They have made it very clear with their support of the Healthcare bill and their direction that they will not be broker friendly. They will pay small if any commissions and will be looking for more of a call center and online feel. I don't believe this is the right approach, but what do you expect from Blue. I believe they will lose a lot of credibility and will have a customer service nightmare.

Sneaky company to watch-United Security- A very small company, but look for them to make a splash in some states like Missouri, Arkansas and a few others. If you need a nice contract with them I can really help you with these guys. I would have them in my back pocket if I were you.

Companies that you will need help with-UHC has always been very broker friendly, but with the coming changes they are moving toward a more FMO type of model. If you know of an organization that does a good amount of business with these guys as much as you probably hate doing it then you need to get underneath them. If you find a good one they will protect you. You can increase your commissions by 30-50% if you find the right person to go under.

In the end the rates and plans will be similar, but don't let the companies pull the wool over your eyes. The big winners will be the companies that go to a percentage base commission and don't lower them or don't lower them very much. You will see a lot of 10 bucks per month per head, some higher some lower. It's just a way to confuse the agent. In some situations it will be better and some it will be worse. Whenever you see a company change it's commission structure it rarely benefits the agent.

 

[PepDaddy]

I have waited to post this because I wanted to gather more information so if you sell individual policies or are getting ready to here is the information that you will need.

1. Come Obamacare the companies are looking to consolidate their business. What I mean by that is they don't want the admin work. They want agents to be underneath organizations that do all of that for them. If you choose to be all by yourself then you will probably see a cut in commissions. They have already been trying to do this model with the big boys basically getting paid more money in commissions to take care of the small things so if you are an individual producer and you don't have an upline besides the company then find a good one. You will make more money by doing this.

2. Commissions will be fine. In fact they will be more than fine. Some companies will do a percentage and some will do per app or per client type of situation kind of like Medicare Advantage. There will be renewals. Some of the companies have already stated that the commissions will be about the same as they are now and they will be off of the unsubsidized amount. Also keep in mind that most companies are setting their renewal date for 12/1/2013 so in actually your client can keep what they have for one more year. The only issue is you get a crappy 2nd year or 3rd year comp on that.

3. The exchanges will be relevant-There will be a lot of people and I mean a lot that will get subsidies, but still a lot of people won't be able to afford that and the ones that do then you will get paid. If they don't want the exchange or an exchange type product then they can't get a Major Medical policy. You heard me right. If they don't take the exchange or an exchange type product they can only get an indemnity type product. Now keep in mind these products will be beefed up to look and feel like a Major Medical, but they won't be one. You will get paid about double what current commissions are today on those type of products. There will be a market for them, but be careful because they aren't major medical and they will still have to pay the penalty with these products.

4. More and more doctor's will start turning away people who don't have insurance. If you can get into a medical facility now then do it. You will get calls because since it's required to have insurance then if you go to the doctor without insurance they will expect cash on the spot or they will ask you to go get insurance and come back. It would be handy for them to refer them to you. It's in the doctor's best interest for you to get insurance so they can get paid and since it's the law there's no excuse now.

5. Rates will be higher in 2014 and then trickle down for a few years. The insurance companies are building into their rates a few factors. One of them is they know that people are waiting to get Obamacare to get a major surgery or to get treatment. They are literally in pain or possibly dying and they are waiting for insurance and the companies know this. You will see in 2015 the rates go down a little. Also you will be flipping your people every year to a new product. You should be doing this anyway, but especially in 2015 it will be a must.

6. You will see many companies make grave mistakes this first year and many smaller companies will either quit operations or merge with a bigger player. It only takes one rate mistake to bankrupt a smaller company. If they were smart they wouldn't be in the exchange the first year and see how it plays out. Individual policies will double over the next few years, but do you want double the people and quadruple the claims? Should be interesting to see the moves the companies make.

7. Companies will get really creative. Right now some companies are sitting back trying to see how little they can give the agents and the agents are letting it happen. Listen everyone there will be companies that pay very well in the exchange. The only issue that you will have is are they the best price? If there is a company that pays good commissions and have good prices then get prepared to rake it in, but there may be a problem if it's the reverse. Agents should expect to get paid and paid well, but all of the forums and the general attitude of the agents is allowing the companies to cut them off at the legs. As soon as you expect more you will get more. Expect less and they will for sure give you less. The bigger agencies will get higher commissions and if you work for the right people you will also get a higher commission. I currently get 16% with Golden Rule. Another company I get 21% and yes it's a major medical. Another I get 13%. Another I get 14%. An agent should expect to get paid. Even if the commissions are cut to 5% your premiums are going to be over doubled and you will sign up twice as many. Commissions cut in half just doubled your income. I don't for see that quite of a cut. Anthem/Blue Cross will probably do that, but they aren't the company I would suggest selling anyway. They aren't a broker friendly company.

8. You will lots of extras in these exchange plans. Companies are trying to set them apart and one way to do that is to add in extra goodies. Deductible credits, free accident insurance, free life insurance etc. If you see 5 plans with pretty much the same coverage, but one has some cool goodies then that's the one agents and clients will go to. You won't believe how creative these plans will be. It's going to be crazy.

9. Have fun. A few years ago when agents were running for the hills my company decided to stay in. We added a P and C department, a medicare department and an Annuity department just for safety sake, but we haven't lost a beat with the health insurance and it's going to get even better. Leads shouldn't be an issue so if you work for a company that doesn't have leads or you can't get them then find someone else. Leads should be easy to attain and they should be cheap. We don't charge our agents any money for leads and they are fresh telemarketed leads. Sure it costs us money to do that, but how are the agents going to sell? I would never want my agents to drive around aimlessly or go walk and talk. Total waste of time when you can have qualified leads ready to talk. I suggest more than anything that agents need to find a good support system as it's not going to be easy doing this yourself, especially with all of the new regulations and tests that the agents will have to go through. It would suck to be a good agent, but get your licensed yanked because you didn't know what to do or how to do it. Everything I say about comp isn't 100% fact, but it is the information that I have squeezed out of some very good sources. I really think that a percentage off of the unsubsidized amount will be the best way for the agents to go.

Josh,

You maybe new to the forum by rank and file with amount of post. But from your post here, I have to ascertain that you are no newbie to what's going on in the real world. I agree with everything you stated, and yes I choose to stick it out, and believe it will be more opportunity going forward. Thanks for the post and much success.

 

[somarco]

Blue have every intention of dominating in almost every market and I expect they will do just that, with or without brokers.

Never a fan of Blue but I found out a long time ago if you try and fight them you are simply cutting your own nose off. Better lie down with dogs than believe you can beat them.

I will not be surprised if their compensation is half what other carriers will pay, but if you can write 2x - 3x the business with them that you would write with someone else you are a fool not to take it.

I am not sure why you are posting about MO while flying an AL flag, but thanks for the run down. If you really are in AL don't count on winning too many battles against BX. They are quite dominant there and have been for a long time.

 

[munda4545]

Can someone post a top ten big careers list for Obama care reform ?
I am L&H agent In CA. like to join careers.... Any more requirement ??
Please post...

 

[benwrigh]

Thanks josh for the informative post. We usually just get bits and pieces of info.

Blue have every intention of dominating in almost every market and I expect they will do just that, with or without brokers.

Never a fan of Blue but I found out a long time ago if you try and fight them you are simply cutting your own nose off. Better lie down with dogs than believe you can beat them.

I will not be surprised if their compensation is half what other carriers will pay, but if you can write 2x - 3x the business with them that you would write with someone else you are a fool not to take it.

I am not sure why you are posting about MO while flying an AL flag, but thanks for the run down. If you really are in AL don't count on winning too many battles against BX. They are quite dominant there and have been for a long time.

They definitely have name recognition in their favor considering many of the companies on the exchange.

 

[joshpeck247]

I am in Missouri. Not sure why it says AL. I will change that.

 

[cadylou]

Good info Josh - thanks. I'm in MO/KS, so I appreciate it.

 

[Nick Rogers]

I'm interested in getting into selling health insurance this coming enrollment. Are you recruiting? I'm in the final expense market, been pretty successful at it. Please get back with me.