30 Second Insurance Tips©

Tip #281 – How Much Should Agents Be Paid?

Last week, I wrote about how a plan design change saved one client a bundle; $18,000 for a group with just four employees.
For the individuals and groups we serve, in most cases we’re paid a flat amount per member per month (PMPM); on average, $25. Commissions are usually embedded in the premiums and paid to us by the health insurer.
Here’s the math for this one four life case.
Our client’s annualized premium is $71,500. At $25 PMPM, our commission ($1,200) isn’t even 2% of the premium. Given the savings we produced – not to mention all the other services provided year round – did we produce a fair ROI?
This is front of mind because Thursday I was at a health care forum where one of three panelists blasted agents and brokers for “gouging” their clients. He insisted those in the audience demand transparency for their broker’s compensation.
So what do you think? Are we over paid?
I’m still fuming . . . . . .