MAPD developments you should pay attention to
BY PHIL CALHOUN and DAVID ETHINGTON
The following is a discussion on commission trends for Medicare Advantage Prescription Drug (MAPD) taking place in California that directly affects broker income.
Wellcare does not offer brokers the opportunity to transfer commissions. This decision prevents brokers who write MAPD with Wellcare the ability to pass their commissions on to anyone should they no longer be able to stay active due to disability. Equally concerning is this blocks the broker’s ability to sell commissions and enjoy the benefits of their years of arduous work.
UHC has a program for high performing MAPD brokers. Select brokers are awarded higher payments under the National Marketing Alliance. Success is rewarded — but then a surprise for some comes when they find they have limited transfer options for retirement.
Read the fine print
High performing brokers with UHC may also face this issue. If you are paid extra for selling UHC MAPD plans, you need to know if you will face limitations upon the sale or transfer of these commissions. It is better to read the fine print now and determine whether there is a transfer/sale option upfront rather than learning there’s a limitation in the middle of a sale or transfer with a commission buyer. In essence UHC has determined that only select National Marketing Alliance brokers can receive a transfer of UHC MAPD commissions.
Many retiring brokers have a trusted buyer — perhaps a colleague or relative — but learn there is no option to get these commissions transferred to them. The result is there is no value in their UHC MAPD book of business. Their only option is to continue certifying annually to continue their commissions.
Somehow UHC put this program in place and brokers gladly accepted the higher payment without realizing they gave up the right to sell or transfer this business.
Brokers do appreciate rewards for their arduous work and success enrolling individuals into medical plans for carriers. This also proves the point that brokers need to read the fine print to be aware of surprise restrictions.
Barbara’s story
As a top producer for UHC MAPD plans, Barbara shared how she worked for years with UHC. Due to her successful Medicare work in her retirement arrangements, she planned to sell her MAPD book of business and only stay active with Medicare Supplements. When she checked with each carrier on their commission transfer process, all the carriers except UHC allowed her commission transfer to go through. She was surprised that none of UHC commissions were transferable — MAPD, PDP and Medicare Supplement. She discovered her designation as a top producer for UHC MAPD was the result. While Barbara was pleased her son was joining her in the business she was highly disappointed that even with his certification with UHC, the transfer of MAPD commissions was blocked. Barbara is hoping that with enough pushback from brokers, UHC will consider changing this decision.
If you have commission success or challenge stories to share, please send them to publisher@calbrokermag.com.
We plan to continue to inform health brokers of commission issues they need to know.
Postpone but protect in 2023
Health insurance professionals are increasingly exploring retirement. Many consider selling their book of business at some point. With 70% of all health brokers aged over 65, research shows that within the next 12 years these brokers will need a plan to transfer their book of business.
Typical choices for exit planning are through the sale of commissions, a merger with an agency, or an internal sale/transfer to younger employed brokers. In any of these cases, we encourage commission planning. When appropriate, find a professional to help coach you through the exit planning process.
In our commission solutions practice, we find 2 out of 5 brokers decided, after considering their options, to work another year. This led them to push through 2023 AHIP and carrier certifications and do the work to renew clients during 2023 AEP.
We also found 40% of brokers with MAPD business we worked this year on exit planning made the decision to stay active with MAPD and PDP for another year.
The brokers who chose to stay in the game will consider selling in 2023. This decision comes after exploring exit options and timing. What they report is how valuable it was for them to learn how to protect their commissions while staying active and conducting business as usual.
“Of our broker clients who made the decision to stay active and postpone the decision to retire, all decided to protect their commissions with a formal written agreement,” David Ethington of Commission Solutions shared. “In our role, we help educate brokers through this process. When called for, we match them with a qualified successor. We create a written agreement covering legal aspects of the protection work the active broker requires.” Being able to answer the question of a client or prospect, “Do you have some who will help me should you retire?” is one of the benefits for brokers who complete a commission protection plan. They have a confident response of “Yes, you will be taken care of. I have a formal backup plan in place with my successor.”
PHIL CALHOUN operates a commission planning consulting service.
Phil’s book published in 2020 and his education programs have helped thousands of health insurance professionals learn how to protect 100% of their health commissions.
For a free copy of the book, “The Broker’s Guide to: Protect, Grow and Sell Health Commissions”
go to www.healthbrokersguide.com.
Contact: phil@commission.solutions or 714-664-0311
DAVID ETHINGTON is VP of the Medicare Division and director of Broker Relations with Commission Solutions, Integrity Advisors. His work has excelled due to his commitment to provide the best service to both health clients and health brokers. David respects the hard work it takes to build a book of business and enjoys working with retiring brokers. He serves on the board of Directors for Orange County Association of Health Underwriters (OCAHU).
David has participated in the commission protection process for seven years He’s also involved in acquisitions, especially in the broker relationship transfer of commissions. David lives in Orange County with his wife and their cats. He is an avid runner and completes several long-distance events annually.
Contact: (714) 664-0605