How Much Can Agents Make Selling Under-65 Insurance?

If you’re looking to enter the under-65 insurance industry, but not quite sure if it’ll be a worthy endeavor, worry no more! We’re here to break down the basics of Affordable Care Act (ACA) commissions.

The ACA market has great potential to be lucrative for insurance agents! Marketplace commission levels vary based on a number of factors, but this means you can customize your own ACA path and the commissions you can earn.

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Let’s look at the details of agent compensation for ACA sales.

Commissions Payments

If you’ve been selling insurance, you’re probably aware of the hierarchies that organize agents partnered with a field marketing organization (FMO). At Ritter, we structure our hierarchy in levels one through 10. These levels are determined by the number of agents operating under and above an agent, and can affect how commissions are paid. Although this structure is more common with agents selling Medicare, this principle can still affect agents selling marketplace plans.

Interested in learning more about FMO structure and organization? Download our eBook, How Insurance FMOs Work!

ACA commissions are paid on a monthly basis and carriers typically pay out early in the month, though it can vary. Commissions earned in the last month are distributed as long as the member has paid their premium and the payment has been posted to their account.

When to Expect Commission Payments

If you sell other insurance products, you may be used to a different payment timeline. Most under-65 carriers pay the initial monthly payment one to two months following the policy effective date. There are some circumstances that can affect the timeliness of your commission payments. For example, if your client pays their member binder or premium payment late, this will delay your commissions.

For example, if your client pays their member binder or premium payment late, this will delay your commissions.

If your client falls victim to an unauthorized plan switch or change to their agent of record, this could cause you to lose commissions. Always ensure that your client shows in your book of business in your marketplace enrollment account. If you are listed as the agent of record and have not received your commission payment within the allotted timeframe, contact your FMO or the carrier if you are paid directly. Agents contracted through Ritter can find contact details through the Ritter Docs carrier pages.

Please note that CMS is working to address situations of marketplace fraud and installing solutions to reduce these situations. A change in your commissions may be the first signal that fraud has occurred.

What Affects Under-65 Commissions?

Because the ACA does not explicitly state what agents can or should earn, commission levels can vary by state, how many household members are enrolled in coverage, and the type of plan sold to a client. There are many possibilities to earn commissions, and we want to make sure that you’re aware of not only the amazing potential under-65 insurance has, but what affects it!

State Exchanges

ACA commissions vary by state; each state has guidance regarding how much agents can earn selling individual health insurance. One carrier in Florida offers agents $30 per member per month (PMPM). This commission structure creates opportunities for agents to earn more commissions!

Please remember that the ACA market continues to change and adapt to the current circumstances and agent commissions are no different! Commissions have increased since 2017 and continue to remain competitive.

Commissions Per Member, Per Month

When selling ACA insurance, agents earn commissions per household member, per month (PMPM). If you enroll multiple household members in a marketplace plan, you can collect commissions on each household member, every month! Commissions can also be paid per contract, per month (PCPM). If the plan operates on this payment schedule, you will be paid one flat rate for all members enrolled in a plan. PMPM continues to be the most common commission payment structure.

The year that a client enrolls in coverage, you’ll receive initial commissions. Every year following the first year is a renewal year, which means you’ll receive renewal commissions. Initial commissions are typically the same as renewal commissions, but some carriers do pay a lower rate for renewing policies.

If you enroll multiple household members in a marketplace plan, you can collect commissions on each household member, every month!

The Plan Sold

Commissions can also vary depending on the plan sold. Health maintenance organization (HMO), preferred provider organization (PPO), and exclusive provider organization (EPO) plans reward commissions to agents based on different percentages. Some carriers pay more commissions for HMO or EPO plans.

How Much Can Agents Earn Selling ACA Plans?

To give you some perspective of the potential commissions you can earn by selling marketplace insurance plans, we’ve taken the time to break down one example agent’s earnings for the month. Jim, an independent insurance agent in Illinois, earns an average of $20 PMPM for each individual health policy sold. Jim has a new ACA client — a 43-year-old mother with two children who also need health insurance. That means that Jim could earn $60 for their family, every month. For one year, that’s $720!

ACA agent commissions can add up quickly, and if your client remains enrolled in marketplace coverage, you can continue to earn commissions PMPM. Additionally, many carriers offer production-based bonuses during the Open Enrollment Period (OEP), increasing your earning potential even more! Read about the possibilities that come with selling marketplace insurance plans

By working with an FMO like Ritter, you could earn more commissions. We offer training opportunities, sales support, assistance with contracting, and the technological support you need to make selling ACA plans easier than before. Through saving time and leveling up your business strategy, you could find more clients and close more sales!

OEP vs. SEP ACA Commissions

In the past, some carriers have paid commissions during the OEP and Special Enrollment Periods (SEPs) differently. This should no longer occur.

On June 7, 2022, CMS stated in an FAQ document that commissions must be equal for OEP & SEP sales. CMS reasoned that marketing practices that discourage agents and brokers from enrolling customers in ACA plans during SEPs is a discriminatory practice.

CMS reasoned that marketing practices that discourage agents and brokers from enrolling customers in ACA plans during SEPs is a discriminatory practice.

Ritter has a dedicated under-65 Sales team committed to supporting you throughout your ACA journey. Register with our site to gain free access to our full library of tools and resources. TouchEvent, get in touch with your sales specialist to start earning more selling ACA insurance.

Editor’s Note: This was originally published in July 2022. It has been updated to include information more relevant to 2024.