How Are California Health Insurance Brokers Paid?

The services given by agents to applicants of individual or family health insurance plans are all free. So what’s the catch? There is no catch for the consumer.

By law, California health insurance agents and brokers are prohibited from charging a fee for their services to consumers. The price of your plan is the same whether you use an agent or not.

Agent Compensation for Individual and Family Health Insurance

Health insurance agents and brokers are paid through commissions.  The insurance companies pay either a flat fee or a percentage of the monthly premium (typically between 1% and 5%) to the insurance agent for bringing them the customer and for continuing to service the client in the future.  Some insurance companies offer periodic bonuses to agents who enroll higher volumes. Commissions often decline after the first year, meaning plan renewals are paid at lower rates.

People who are seeking insurance for themselves or for their families should understand how health insurance agents are paid so that they choose an agent wisely. Agents who have bonus incentives to sell more of one particular insurance company may not meet your needs the best.

Individuals who choose independent agents or brokers who sell a variety of insurance companies’ plans will have the most options and are more likely to find a more suitable plan for their needs. Individuals who choose a captive agent, one who sells only one insurance company’s plans, limit their options to only one insurance carrier. Learn more about Health Insurance Agents vs Brokers to understand these differences better.


Not sure how Obamacare affects your health care plans in California? Learn how the ACA works in California, including benefits, costs and enrollment.

Covered California is the Golden State’s official health exchange marketplace where individuals, families and small businesses can find high-quality, low-cost California government health insurance.

Learn about Obamacare income guidelines in California using our income limits chart, and see if you’re eligible for government assistance.

Learn about the Covered California website. Find easy online enrollment. Set up your account, log in, buy insurance and more on the California health marketplace website.