Shady Commission Tactics from Carriers

[dgoldenz]

So I've now found out that two separate companies that I sold a bunch of policies for are only paying per policy, not per enrollee. Both companies termed their commissions as "per subscriber, per month" - so I am expecting $15/mo for one person, $60/mo for family of 4, etc. There's a third company I sell that uses the same "per subscriber, per month" language in their commission agreement and they actually pay per enrollee.

Many of these policies were moved from a competing BCBS carrier that pays reasonable commissions and has a good product (relatively speaking), so it actually cost me a whole bunch of money to move these policies, not to mention the time lost doing it. Won't be doing that again next year.

The brokerage I work with didn't even know that one of these companies was paying per policy until the 2017 commission statements were generated because last year they paid per enrollee in the exact same amount, now they just changed it to per policy without any statement to agents. What a joke.

If you have a carrier that pays "per subscriber per month", are they paying you per policy or per enrollee? This seems extremely misleading and unethical. I have told both companies I will never sell their policies again. Even my account rep at one of the companies told the executives that it was misleading to agents before they decided to do it, and they did it anyway. They could have termed it "per contract per month" or "per policy per month" or "per primary applicant per month" or any other description of what it actually is, yet they specifically chose to term it as "per subscriber"

 

[Ann H]

I can't speak for other regions, but here in AZ, when they say "Per Member Per Month" or "Per Subscriber Per Month", it is per family instead of per belly button. Our group plans word it that way too.

It's not fair. You do more customer service work for a family of 4 than for a single enrollee. Also, the premium income to the carrier is higher for a family than for a single enrollee.

I have to watch this wording on group bonuses, too, because sometimes they have a threshold of a certain number of cases in order to qualify for the bonus, and they mean group accounts, not enrolled employee, nor bellybuttons.

Dgoldenz, if they paid "per bellybutton" last year, but "per contract" this year without notifying you in writing that the commission agreement had changed, then I would think that you have rights to appeal.

 

[dgoldenz]

Here's the flyer I found, I guess it's my fault for glossing over the word "contract" in here and assuming they hadn't made any changes to the comp from last year since it was the same number. Still seems extremely misleading, especially given that this was buried in another email with a link to the file, and there was no specific statement in any documents about reducing compensation, and the original document link stating that "Carrier XYZ is offering some of the most competitive compensation on individual plans in the Mid-Atlantic States market" (lofuckingl @ $200/policy):

"Carrier XYZ offers one of the highest compensation programs on individual plans in our region. 2017 will offer you new ways to increase your commissions with Carrier XYZ. In 2017, we are:

-Contuing to pay commissions during both open enrollment and special enrollment periods
-Lowering the qualifying level to earn a year-end book fo business bonus
-For each new subscriber contract, you'll get a payment of $200 after the first month of coverage. We will not retroactively adjust this payment if the subscriber leaves Carrier XYZ
-You will get $200 for every subscriber who renews. We pay commissions during both OEP and SEP. Compensation is the same for on-or-off-exchange enrollments. "

Considering the past two years they paid $200 for every person that enrolled and every person that renewed, I just (wrongly) assumed that would remain the same for this year.

 

[junkman]

Carriers always try to cut rates and only pay commissions because they have no delivery service other than agents. Commissions go to $0 if they can find a way. Read the contract both yours and client's. You need to know what you're selling and keep it in interests of clients and you.

 

[tonyisme]

Yeah they figured out how to have sales "employees" and not pay any payroll taxes or benefits on them... they have eliminated the motivation to sell....