Even if you’re satisfied with your performance in 2023, the arrival of a new year presents an excellent opportunity to implement changes that could increase your commissions over the next 12 months. If your focus has traditionally been on Small Group Medical, consider expanding into Ancillary sales or moving into Large Group Medical and Ancillary sales. At Word & Brown, we have both the expertise and the experts to help you make the transition.
Your commissions will vary based on the product, carrier, and market niche. However, as discussed in a previous commissions post from October 2023, commissions are typically comparable on similar products. You may also be eligible for bonuses or awards based on your cumulative sales or additional compensation for products sold during specific sales contest periods.
For 2024, several bonuses have already been announced. Companion Life is offering its 2025 Leaders Conference trip to Santorini, Greece, for Nevada brokers, while Health Net has announced 2024 bonus opportunities for California brokers. As the year progresses, we anticipate more carriers will announce additional bonuses.
Brokers often gravitate toward employer-sponsored Group Health/Major Medical because it offers consistent compensation, both in the first year and in subsequent years. This contrasts with Individual & Family Plan (IFP) coverage, which may offer a higher first-year commission but lower payouts in later 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 2022 was $23.78 per member per month (pmpm), and $10.49 pmpm for Large Group brokers. In California, the average Small Group broker comp was $21.75, compared to $7.92 for Large Group market brokers. The Nevada average for Small Group market brokers was $30.58, with an average $13.98 pmpm for Large Group market brokers.
Of course, the difference in compensation is often offset by the potential to earn more on a larger case due to 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
The COVID-19 pandemic has changed what employers and employees expect from their benefits programs. According to the MetLife U.S. Employee Benefit Trends Study, released in 2023, employees’ priorities continue to evolve. Eighty-nine percent of employees now say health insurance is a “must have,” with another 8% considering it “nice to have” – fewer than 3% say it is not needed. Dental insurance, vision insurance, and life insurance also rank high among employees. Critical illness, accident insurance, hospital indemnity, and cancer insurance are classified as “must have” or “nice to have” by 80+ percent of respondents in the MetLife survey.
More businesses and employees are open to products they hadn’t considered before. This widening of interest translates to increased earning potential for brokers. Expanding your business with current customers is generally more cost-effective than attracting new ones. Don’t overlook your lapsed customers; if you have more to offer them now, they might be receptive to a call or visit.
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 bearing the full cost.
Compensation varies by product type and carrier or administrator. You might earn a consistent commission percentage year after year, depending on your contract and the insurer. Alternatively, you might earn a commission based on group size or annualized premium. Some plans offer a higher amount during the first year, a lower amount in year two, and a declining percentage in later years.
Ancillary products like Dental, Vision, Life, and Disability (STD, LTD) generally pay a level commission for all years. You might earn 11% on Dental and Vision, while earning more, perhaps 16%, on Accidental Death & Dismemberment (AD&D) and Disability sales. Some carriers even offer negotiable commissions. For 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 negotiable for Cigna Medical and Dental as well.
Commissions could also 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 enhance your income in 2024 with bonuses from various carriers. For instance, our carrier partners are expected to offer numerous bonus opportunities. Two programs for 2024 have already been announced, and more are sure to follow.
If you’re unsure who is offering what, which products are eligible, under what conditions bonuses will be paid, and all the associated rules, consult your Word & Brown representative. We’ll help you navigate through it all.
If you are interested in getting into – or expanding – your Large Group sales, speak 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.
