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I was talking to one of my agents who brought this to my attention (I overlooked it). This is from the CMS release on 10/8/2008:
Agent/Broker compensation – On page 22 of the September 15, 2008, guidance document, we established a process for transitioning to the new compensation structure in the first year in which any movement of a beneficiary in 2009 would result in the agent/broker receiving an initial compensation amount. In 2009, CMS and the plans have insufficient information to reliably designate a beneficiary for an initial or renewal enrollment until our systems can be programmed to provide this information. Since we have become increasingly concerned about the potential incentives for agents/brokers to “churn” beneficiaries in order to receive
the initial compensation amount, we have decided to transition to the new compensation structure by requiring that renewal compensation amounts be paid for all beneficiary enrollments in CY2009. We will consider this the first renewal year for all enrollment changes. Plans that pay the renewal compensation amount for enrollments in 2009 will still be required to pay renewal compensation for four additional renewal years if the agent/broker is still in good standing with the plan and the State, and the beneficiary is still enrolled in the plan. Plans should establish a first year and renewal/replacement compensation structure for 2009 using our rules for calculating the compensation. The plans would not be paying the first year amount and would only pay the renewal/replacement amount. Due to the recent HPMS email that delayed the date on which plans’ compensation structures would be set, and the new guidance provided in this memo, plans are now expected to have their compensation structures in place no later than October 15, 2008. This includes the actual compensation amounts as well as the structure.
So, what this is saying is that all 2009 MA's will be paid only renewals, no initial first year commissions.
Now I am curious as to what the carriers are going to do for agent compensation.
Agent/Broker compensation – On page 22 of the September 15, 2008, guidance document, we established a process for transitioning to the new compensation structure in the first year in which any movement of a beneficiary in 2009 would result in the agent/broker receiving an initial compensation amount. In 2009, CMS and the plans have insufficient information to reliably designate a beneficiary for an initial or renewal enrollment until our systems can be programmed to provide this information. Since we have become increasingly concerned about the potential incentives for agents/brokers to “churn” beneficiaries in order to receive
the initial compensation amount, we have decided to transition to the new compensation structure by requiring that renewal compensation amounts be paid for all beneficiary enrollments in CY2009. We will consider this the first renewal year for all enrollment changes. Plans that pay the renewal compensation amount for enrollments in 2009 will still be required to pay renewal compensation for four additional renewal years if the agent/broker is still in good standing with the plan and the State, and the beneficiary is still enrolled in the plan. Plans should establish a first year and renewal/replacement compensation structure for 2009 using our rules for calculating the compensation. The plans would not be paying the first year amount and would only pay the renewal/replacement amount. Due to the recent HPMS email that delayed the date on which plans’ compensation structures would be set, and the new guidance provided in this memo, plans are now expected to have their compensation structures in place no later than October 15, 2008. This includes the actual compensation amounts as well as the structure.
So, what this is saying is that all 2009 MA's will be paid only renewals, no initial first year commissions.
Now I am curious as to what the carriers are going to do for agent compensation.