Carrier News

BCBS Updates Retail (Individual Under 65) Compensation to PMPM in 2021

BCBS is changing its compensation schedule for individual under 65 major medical qualified health plans (QHPs). They are moving away from a percent-of-premium, which was tiered by production level and reduced by half after the first year, to a flat per-member-per-month (PMPM) model that remains the same in renewal years.

The commission structure change will be in effect for new and renewing policies with effective dates on or after Jan 1, 2021. Commissions will be based on the number of members up to five members per policy. See their official announcement.

A few quick comments about the impact of the change using 2019 average premium per policy and members covered per policy data from their most recent MLR filing.

  • BCBS’s average premium per policy was $852.
  • BCBS  reported an average of 1.56 members covered per policy.
  • The $20 PMPM rate for Blue Advantage plan sales equates to 3.7% of premium.
  • The $15 PMPM rate for MyBlue Health plan sales equates to 2.8% of premium.
  • On the average, the PMPM conversion is a little lower for active producers in the first year, but it will deliver more revenue over a three year period than the top commission level (Tier 1) under the old structure.
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