Blues Announces New 2013 Agent Compensation Structure

Blue Cross Blue Shield of Michigan and Blue Care Network’s agent compensation structure will change in 2013 as part of an enterprise-wide business transformation that will position the Blues for the future and reaffirm their commitment to using agents both on and off the exchange.

While the compensation structure changes are not effective until Jan. 2013, they know that early notification is critical to you, so they’re sharing this information with you now.

2013 Compensation Changes

1. Self-funded group business

Effective Jan. 1, 2013, for new business and upon an existing group’s 2013 renewal, the Blues will no longer pay commissions for any self-funded business. This means that agents will be responsible for directly negotiating their compensation with their groups that have self-funded arrangements.

To support this change, the compensation section of the agent agreement will be amended effective Jan. 1, 2013, to exclude compensation for BCBSM and BCN self-funded business. With this change, agents won’t be required to sign new agreements with the Blues.

In addition, the Blues have also reviewed their pricing structure for self-funded customers from several aspects, including their competitive market position, increasing medical costs and health care reform, as well as their overall agent distribution channel and compensation structure.

As a result of this review, along with other broad efforts by the Blues to control health care expenses, the majority of agent-affiliated customers will see reductions in their administrative fees in 2013, some up to 10 percent.

Blue Cross Blue Shield understands you’ll have questions about how this impacts 2013 renewals. They’ll share more details with you in the coming weeks. They’ll also mail a letter to the impacted self-funded customers making them aware of the change and expressing the value agents provide to their business. They’ll provide a copy of the letter with you before it’s mailed to groups.

2. Underwritten group business

The following agent commission changes will become effective Jan. 1, 2013, for all underwritten group business:

• The Blues are moving to a four-tiered commission schedule that ties commission levels to the volume of active Blues contracts. A new tier, Platinum, will be added to the existing structure of Premier, Preferred and Standard agents. Platinum agents will be the highest paid tier. Agent tier levels will be determined each year based upon the number of active combined BCBSM and BCN medical contracts in force as of Jan. 31 of that year. Commissions will change, on average, less than 10 percent.
• New commission schedules will be introduced for all new and existing underwritten group business effective January 2013.
• The commission payment for underwritten groups with one to four enrolled contracts remains unchanged for 2013.
• We have increased most of our dental and vision commissions to improve our competitive position in the market. Commissions for dental and vision will be based upon group size, not the tiered structure.
• All historic commission exceptions will be eliminated unless expressly authorized and funded by group customers
• These changes, as well as other administrative cost adjustments, will be taken into account when setting premium rates.

The new commission schedules will be available on Agent Secured Services. Click on the Agent Resources tab, then Commission Schedule.

Blue Rewards and other agent bonus program

In addition to the Blue Rewards program, they’ll be announcing new agent bonus opportunities in 2013.

Questions?  Contact your Blues sales representative or managing agent.