Health Insurance Commissions: Is It A Dirty Word?
I was reading an article on Omaha.com entitled “Insurance Agents Feeling Left Out Of Obamacare” and ran across a statement by Richard Stark who is also an insurance agent. He stated, “They basically didn’t want to work with insurance agents because they felt agents were going to steer a customer toward (a plan) where they think they will make the most money.”
Another article I read from familiesusa.org by Claire McAndrew and Erin Snyder entitled “Consumer Protections For Web Brokers That Participate In The Health Insurance Marketplace”, made the following statement about web brokers “Allowing web brokers to enroll consumers in marketplace plans and financial assistance may help raise awareness of coverage options and increase enrollment. But there are drawbacks: Because web brokers receive compensation from health insurance companies for enrolling people, those financial incentives could influence how web brokers market to and enroll consumers.” They also mentioned in their PDF Guide “Direct Enrollment By Web Brokers And Insurers”, that one of the concerns was that “Financial incentives influence how insurers and web brokers market to and enroll consumers” among other concerns.
One thing that’s rarely ever taken into consideration is that although many health insurance agents do receive their pay in the form of commissions for the most part we do not let commissions dictate what plans we offer to our clients. What if we directed all of our clients to the plan that paid us the biggest commissions? What happens when they realize that the plan doesn’t include their doctor, their medications or their favorite hospital? How long could we stay in business doing business this way? For the majority of independent insurance agents customer satisfaction is of the utmost importance. Most of us do our best to assist our clients to find the plan that works best for them.
So what are health insurance commissions?
For us commissions are our livelihood. It’s the mode of payment that some insurance agents accept as a condition of their contract. Being paid by commissions means we are our own boss. It gives independent agents the freedom to choose our own schedule which in most cases works to the advantage of our clients, since many of us work non traditional hours. I can’t count the number of times I worked with a client as late as 10 or 11pm.
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So in my opinion in most cases receiving commissions do not for the most part influence how insurance agents conduct their business. It can be compared to a self-employed person who works for an hourly wage and one who receives a flat fee. Just because one receives an hourly wage does not mean that they will drag the time out working as slow as possible to make the most money. True some may do this but that kind of reputation would quickly kill their business as well as their change of any referrals and repeat business.
What many people do not know is that many agents worked on their behalf for free during the last open enrollment period. Although we followed all of the rules many have given up on ever getting paid. Some companies pay commissions at just under $16 per month. The agent who worked on your behalf only gets paid this small commission if the client pays their bill. If the client does not pay then we worked for free. Many agents enrolled their customers in plans with these companies because it was in their best interest.
So whether you get paid a salary, a per hour wage, tips or commission it’s not how you get paid that count’s but how you do the job and how well you service your customer.