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. Further, a June 2022 ruling from the Centers for Medicare & Medicaid Services (CMS) creates more opportunities for agents to earn even more commissions.

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. 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.

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.

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. KFF published a map showing individual broker market compensation by state for 2021. Insurance agents in Nebraska selling under-65 insurance can earn an average of $23.54, per member, per month (PMPM)! The per member, per month structure creates even more opportunities to make the most of ACA sales!

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. For example, commissions in Nebraska have increased every year.

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 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 higher than renewal commissions, so don’t be surprised when the renewal year comes around and your commission rate is not as high as the year before.

For each household enrolled in marketplace coverage, if you enroll multiple household members in a 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. Commissions also vary from carrier to carrier. Pay attention to the commissions you earn depending on the plan that your client enrolls in. Remember, slight differences in plans can explain some of the variances you see in commissions each month.

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 $22.66 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 $67.98 for their family, every month. For one year, that’s $815.76!

ACA 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! We’ve previously reported on the possibilities that come with selling marketplace insurance plans. Read the post here!

By working with a field marketing organization (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, the 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.

We cover this update in more detail in another post. Make sure to subscribe the Ritter blog to stay up to date with the most recent changes in the insurance industry!

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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 and then get in touch with your local under-65 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 2023.

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