What Should California Insurance Agents Get Paid for Health Care Enrollments

by John Hansen

CAHU research suggests that based on the amount of expertise required and the amount of work to service consumers, California insurance agents should get paid 8-10% of insurance premiums for health care enrollments they place. 

The Work of the Insurance Agent

Health insurance brokers acquire clients who want to apply for coverage, enroll customers in health care products, explain benefits and networks, and offer service. According to CAHU, 72% of the time California health insurance agents spend a lot of time with a client.

CAHU President Lujan said, “Personally, I believe 8-10% would be fair and reasonable.” He said that CAHU has not taken a stance that they would suggest an exact percentage. However, in their research based on the amount of work California insurance agents do related to health care enrollment, the researchers decided that 8-10% would be about right based on the expertise required and the amount of work that California agents do.

Idea to Remove Agent Commissions from the MLR

At the Capitol Summit 2016 on May 17, one California insurance agent suggested that commissions be taken out of the MLR (medical loss ratio). The agent’s thinking was that this would encourage higher commissions for health care enrollments.

President Lujan responded, “I think it would be naïve to think if it were out of the MLR that would affect it.” He concluded that health plans are already getting very comfortable with paying brokers lower commissions health care enrollment. Lujan felt that whether or not compensation was included in the MLR would likely have little effect on commissions for California insurance agents who sign consumers up for medical insurance.


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