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Insurance Broker Fees


Guest emccright
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Guest emccright

Does anyone have or know where to find standard insurance broker fees/commissions for medical, dental and vision plans for medium sized companies (400-500 employees)?

Thank you.

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On large groups it really is case by case and driven by competition or negotiation. Generally across the country it seems to range from 1% to over 6% in total paid out, however as Mr. Spitzer has pointed out some or more is sometimes hidden or imbedded under other items.

It also depends on the level you are looking at. There is the Writing Agent/Broker, the General Agent, the Managing General Agent, the National Marketing Organization or IMO, etc etc etc all taking a piece of the pie. So it depends on whose commission level you want to find out about.

The only general source of information that I have come across, is what was filed with the state regulators for the product approval. Usually there is a Matrix that covers the pricing with commisssions at levels starting from even 0% and going up to the maximum planned. However, that max only covers what is being termed as commissions. Other terms can be used which cover "other" producer compensation. I have seen things such as brochure design and brochure delivery costs paid to agents as a way of keeping the disclosed commissions at a level acceptable to the unsuspecting client.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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  • 2 weeks later...
Guest budman

On self-funded plans with stop loss are most brokers paid a percentage of the stop loss commission and what is the average percentage or are most TPAs or companies paying brokers a flat fee and if so what are they typically figured at?

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On the self funded plans that I have seen over the years, the stop loss commission is different from the commission on the actual plan. In many cases they are paid to different people. I even think that in some states stop loss is not even sold by health insurance agents but by someone with a P&C license.

The TPA pays a commission which is either a per head per month amount or a % of the admin fee. Iusually see the per head as standard. How much this is seems to depend on what the traffic will bear.

The stop loss might or might not be secured through the same Claims Administrator (TPA) and so the broker might or might not be the same, bearing licensing and appointment concerns in mind.

Then there are those insurers that have ASO services. They seem to all pay something from the Admin Fee but nothing from the stop loss since that is usually an "in house" part of the contract.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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  • 2 weeks later...
Guest budman

Can anyone share how and what TPAs are compensating brokers---either pepm, percentage of stop-loss, flat fee--and what that average compensation may be such as $2.00 pepm, or 2% of stop-loss commission or what range for flat fee for the group size?

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