Even if you’re happy with what you earned in 2021, the arrival of a new year presents an opportunity for you to make some changes that allow you to earn more commissions in the next 12 months.
If your focus has traditionally been on Small Group Medical, you can expand into Ancillary sales. Or, you can move into Large Group Medical and Ancillary sales. At Word & Brown, we have the expertise – and the experts – to help you.
Your commissions will vary by product, carrier, and market niche, although as we discussed in a prior commissions post from October 2021, commissions are typically comparable on similar products.
You may also be eligible to earn bonuses or awards based on your cumulative sales or added compensation for products sold during a sales contest period. Already for 2022, Companion Life has announced its 2023 Leaders Conference trip to Florence, Italy, for Nevada brokers and Health Net has announced 2022 bonus opportunities for California brokers. (It’s still early, and more bonuses from more carriers are expected this year.)
Brokers are often attracted to employer-sponsored Group Health/Major Medical because it offers the same compensation in the first and subsequent years. That compares to Individual & Family Plan (IFP) coverage that may offer a higher first-year commission with lower payouts in subsequent years.
According to an analysis published by Kaiser Family Foundation (KFF), a non-profit organization not affiliated with Kaiser Permanente health plan, the national compensation for Small Group health insurance brokers in 2020 was $22.54 per member per month (pmpm), and $9.97 pmpm for Large Group brokers. In California, the average Small Group broker comp was $20.25, as compared to $7.23 for Large Group market brokers. The Nevada average for Small Group market brokers was $29.06, with an average $13.07 pmpm for Large Group market brokers. (KFF has not released its report on 2021 broker comp, as of the date when this article was written.)
Of course, the difference in compensation is, at least offset partially, by the potential to earn more on a larger case because of higher case enrollments. In California, Large Groups are those with 101 or more employees; in Nevada, Large Groups are those with more than 50 employees.
Groups Expect More Today
COVID-19 has prompted employers – and employees – to reconsider what they want from their benefits programs and what they consider important.
According to the MetLife U.S. Employee Benefit Trends Study, released in 2021, employees’ priorities are shifting. Eighty-five percent of employees say health insurance is a “must have” and another 10% say it’s “nice to have” – fewer than 5% say it is not needed. Also ranking high for employees are dental insurance, vision insurance, and life insurance. Critical illness, accident insurance, hospital indemnity, and cancer insurance were ranked as “must have” or “nice to have” by a combined 80+ percentage of respondents to the MetLife survey.
Some businesses and employees are open to products they have not considered – or may have turned down – in the past. Doors are opening, and that means increased earning potential for you. Remember, it costs less to expand your business with a current customer than to attract a new customer. Don’t overlook reaching out to your lapsed customers, too. If you have more to offer them now, they might welcome a call or visit from you.
Sponsored and Voluntary Both Offer Opportunities
Even if your employer client does not contribute to the cost of employee coverage, many products are available on a voluntary basis, with employees paying the full cost.
Compensation varies by product type and carrier or administrator. For example, you could earn the same commission percentage year after year. It depends on your contract and the insurer. You might earn a commission based on group size or annualized premium. Alternatively, you may earn a set percentage up to a specified premium amount – and a lower commission on premium above that amount. Some plans pay a higher amount during the first year, a lower amount in year two, and a declining percent in later years.
Ancillary products like Dental, Vision, Life, and Disability (STD, LTD) typically pay a level commission for all years. You could earn 10% on Dental and Vision, while earning more, perhaps 15%, on Accidental Death & Dismemberment (AD&D) and Disability sales. Some carriers may even offer a negotiable commission. As an example, in California, Cigna’s Medical and Dental products and Dental from the California Dental Network both offer a negotiable commission for 101+ groups. Nevada commissions are also negotiable for Cigna Medical and Dental.
Commissions could be affected by whether you co-broker a product in partnership with another broker, especially for larger groups.
New Year Bonus Possibilities
You can also boost your income in 2022 with a bonus from one or more carriers. Looking at 2021, for example, our carrier partners offered more than a dozen bonus opportunities to brokers. As mentioned before, two programs for 2022 have already been announced, and more are sure to follow.
If you don’t know who is offering what, what products are eligible, under what conditions a bonus will be paid, and all of the associated rules, talk with your Word & Brown representative. We’ll help you sort it out.
If you want to get into – or expand – your Large Group sales, talk with the Large Group team at Word & Brown.
We’re Here to Help!
Partnering with the right General Agency can make a big difference – for you and those you serve. At Word & Brown, we work with dozens of carriers and administrators to give California and Nevada brokers access to a broad range of products and services.
To learn more about all we offer to help you write more, earn more, and keep customers coming back year after year, contact your Word & Brown representative or call 800-869-6989.