Priority Health (a Michigan carrier) just now sent the haircut letter telling us they are halving commissions for May 1st and beyond effective dates. Huh? What took them so long?
"Agent commissions are considered administrative expenses and currently result in our not meeting the required MLR."
They only reintroduced an individual product in December after at least a couple years of group only. Obviously, they knew what was coming but I guess they figured they would get more brokers if they offered high commissions. Maybe they honestly thought they could continue with pre-reform commissions but I doubt it.
"Agent commissions are considered administrative expenses and currently result in our not meeting the required MLR."
They only reintroduced an individual product in December after at least a couple years of group only. Obviously, they knew what was coming but I guess they figured they would get more brokers if they offered high commissions. Maybe they honestly thought they could continue with pre-reform commissions but I doubt it.
