Many times I see in my Google Analytics that people want to know what is the average commissions paid to health insurance brokers? Where does this curiosity come from? Most likely because when they filled out an internet form for a health insurance quote they were immediately called by several health insurance agents all at once. The vultures swarmed so to speak.
The reason for this lately of course is because after the housing bubble crashed which directly proceeded the tech bubble crash all of these salespeople had to find a business to go into so they could use their talents of deception. Many of them chose health insurance, but not really health insurance many of them chose to go into so-called indemnity policies.
These policies are not underwritten medically which is in theory the right way to do things, as health insurance companies declining sick people though profitable, is unpalatable at best to put it as nicely as I can.
Even worse? The guy trying to sell you an indemnity policy or discount plan in place of an actual individual health insurance policy. Similarly if you have a group health insurance and your job is stable (or as stable as can be expected in this economy) it is always advisable to go on group health insurance. Please note: Our agents may in fact suggest an indemnity policy, among other supplemental coverage options, if there are no other plans available on the individual market and it is outside of Open Enrollment.
Why does anyone sell these policies when the commissions on a normal health insurance policy or high enough? That I can’t figure out, except maybe because your agent is an ex-convict and can’t get a license. Because it is much harder work to sell one of these policies than a normal health insurance policies where you can easily double up on the indemnity/discount guy.
In any case, the average health insurance commissions are 12% of the first year and 5% of the second year’s premiums. This the retail commission so to speak as the larger brokers like Every Choice Health Insurance have a volume contract with these health insurance companies and have been building our agency for a long time. So the volume contracts typically average 25% though I have heard they can run as high as 30% for companies like United Health One. I believe we are at 28% with them.
Which companies are treating their agents best?
Anthem, Kaiser, and Aetna offer fair compensation to appointed brokers of their products across various states – sometimes even for Special Enrollment Period applications.
Anthem pays $20PMPM in several states. Kaiser pays $100 for each new member and $50 for each renewal, annually. Aetna offers $15PMPM to top producers, and like Kaiser, often includes attractive renewal incentives. Miami-based Florida carrier AvMed, pays $13PMPM. On the lower end, Aetna’s near-extinct subsidiary Coventry pays $7PMPM to its producers.
Humana, Anthem, Molina, Ambetter and most other companies we love to offer our clients pay producers nothing outside of Open Enrollment. Truthfully, the majority of carriers offering individual and family plans during Open Enrollment and for Special Enrollment Periods do not pay commission.
Share this Post