Medicare Supplement GI Commission Reductions

Medicare Supplement GI Commission Reductions

If you are an agent who offers Medicare supplement plans, you need to read this.  There are Medicare Supplement GI Commission Reductions in most states.  Medicare supplement plans pay various amounts of compensation.  This depends on the company, plan chosen and election period you use.  We will point out some of the times that Medicare supplements pay a lower compensation compared to the normal amount.

What do Medicare Supplements usually pay for compensation?

Medicare supplement commission varies depending on the company and supplement plan you choose.   Most Medicare Supplement carriers typically pay anywhere from 12% to 22% commission on paid premium. Some carriers will pay a set amount per supplement sales and do not use a percentage based payment system.  The percentage based payments will obviously have much lower payouts for low cost supplements such as plans L,K and high F.  The companies paying a set amount will also usually lower their set payment amount for lower premium supplements.

Be aware when selling Medicare Supplement plans A,B and C

Medicare supplement plans A, B and C are the only plans that can be offered to Medicare eligible people under the age of 65. As a result, the loss ratio is usually not very good with these plans. This leads to very high premiums on the plans.  It also results in very little to no compensation pay for the agents who sell them.  Some carriers will pay a 1% or 2% commission for plan A, B or C sales. Most companies will not pay any comp at all on the plans.

Selling during a guaranteed issue period (GI) –

There are Medicare Supplement GI Commission Reductions for sales made during Guaranteed issue GI periods.

This is common in states that allow medical underwriting.  Some states are GI at all times such as NY, CT and MA.  You will not usually see GI comp reductions in the states that are GI at all times.  For states that do allow medical underwriting outside of GI periods it is very common to see carriers offer a greatly reduced compensation for sales made during GI.  Usually the reduction is substantial with comp only being 1% to 3%.  An example of a GI sale is a sale made when someone turns 65.  No state can medically underwrite a person when they are turning 65.  They have a guaranteed issue right regardless of health.  As a result, some carriers will not pay much comp for these sales.

 If you are selling a supplement with a company you are not that familiar with or in a state that you are not that familiar with, it is suggested you check with the carrier or your up-line to see if they have a reduced comp for the sale.

GI periods can also be applicable when someone dropping group/employer coverage over the age of 65 and enrolling into Medicare part B for the first time.

Call our office if you have questions regarding reduced supplement comp. We can be contacted at 203-796-5403 or on on our website.  CLICK HERE FOR WEBSITE