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Commission Rates

Commission Rates are associated with Contracts and provide factors used in calculating commissions.

Commission Rates are associated with Contracts and provide factors used in calculating commissions. They can be entered manually or can be created from an import. They are accessed from the Contract List page.

There is a link from a Contract to go directly to Add Commission Rates or access a list page of Commission Rates by selecting View/Edit Commission Rates.

Contract List page – detail of line options.

Selecting Add Commission Rates will bring up a page to create a new Contract Plan Rate.

Commission Rates Detail page

After entering the Issuer, and Product Type, the system will display the rest of the page appropriate for the Product Type. Medicare Advantage (MAPD) and Medicare Prescription (PDP) rates display fields for Street and Override. See the the User Guide Medicare for further details. All other Product Types bring up a page with fields to enter an Advance Value and rates by month.

Add Commission Rate for Product Types that are not MAPD or PDP:

 

Add Commission Rate page when Medicare Advantage Product Type selected:


 

Selecting View/Edit Commission Rates displays a list of existing Commission Rates. From this page you can access Commission Rates with Edit/View Commission Rate Details as well as to Add New Commission Rate.

Commission Rates list page


 

Selecting Edit/View Commission Rate Details will open the detail page for an existing Contract Plan Rate.

Commission Rates detail page. 

The following fields are in Commission Rates for Product Types other than MAPD and PDP:

  • Issuer – Selection will be from Issuers (Carriers) from Commissionable Products. This and the next three fields narrow down to a specific Commissionable Product to be selected.
  • State – Individual States can be maintained, ‘select’ all is all an option. If left blank all States will be applied. IN ORDER TO PICK UP POLICIES WHERE NO STATE HAS BEEN ENTERED, ‘ANY’ MUST BE SELECTED on a Plan Rate. If you have one Commission Rates for a Commission Product with selected States, and for the same commissionable product ‘ANY’ selected, the system will check to see if there are a plan with the specific State and select that first, and if not, then apply the Plan with ‘ANY.’
  • Product Type – selection of Product Types associated with the Commission Product
  • Plan Name - selection of Product Types associated with the Commissionable Product
  • Advance Months is the number of advanced months the system can apply. This is only one factor as there can be As Earned settings by the Agent, Pay Codes, and Custom Settings for Agents that must be considered for the final number of Advanced Months.
  • Admin Fee Rate – the is to apply an Admin Fee based on Advances. The full amount of the Advance (both percentage and Fixed Amount Advances) would be multiplied times this rate to calculate an Admin Fee amount.
  • Effective Date (From-To) is the date range the Plan Rate is effective for and can be picked up in the commission calculation. The dates this range are to be based on is according to the next field for ‘Date Range Based On.’ Having a date range allows Commission Rates with dates in the future for a commissionable product to be added and picked up for commissions on Policies that fall into the date range. Rates for the plan for dates in the past can also be maintained. When a plan does have more than one rate based on date, a section will display in the middle of the page showing the other plans and date range. (See below).
  • Date Range Based On – There is two options, Submitted Date and Effective Date with the date range to be used on date fields in the Policy with the same name. These should be set based on what the carrier bases their rate changes. When the Plan Rate is set for Effective Date, the cycle calculations will look at the Effective Date field in Policy details to see if it is within the date range. If the Plan Rate is set for Submitted Date, it will look at the Submitted Date field in the Policy details to see if the Policy is within the date range. For example, Medicare (MAPD & PDP) has new rates based on the Effective Date (January 1st). Other Issuers can have rates change on when the policy is submitted. It is important to check with the Issuer on when Rates will change and the date it should be applied.
  • Conventional Rates and Locked Rates options – is an option to allow a locked rate so an Agent will receive Commissions in the rate or fixed amount indicated. Conventional Rates work by subtracting the rate of the previous Agent from the rate of the Agent. With a locked Rate the Agents will receive the rate entered in the Commission Rate page.
  • Commission Rate Section
    • From Month = number for the starting month (for example month 1)
    • To Month = number for the ending month for the rate to be applied. (An example may be that the From Month is 1, the To Month is 12 for rates for the first year, and then another row that would have From Month 13 and To Month 999 for all months after the first year.)
    • Contract Rate = Percentage (format: xxx.xx%) For example 50.00% rate (% rate x Premium)
    • Fixed Amount = Flat/dollar (format: $xxxxxxx.xx)

 

How Contract Rates are used in a Commission Cycle:

The Commission calculation in a cycle is based on the Rates of the Agent less the Rates of the Previous Agent. So, if you have Agents with contracts representing Low, Medium, and High (Top Level), Rates need to be equal or greater than as they are for a higher level. For example, if the Writing Agent at a low contract level may be 35%, next level rate could be 45% (so they would receive commission of 45% less 35% or 10%), and Top Level of 50% (so they would receive 5% (50% less 45%).

 

Fixed rates will work in the same way so the rates should be in ascending amounts of $40, $50, $60. If the Writing Agent has the middle contract fixed amount of $50 ($50 less $0.00 since no previous Agent Level before them), and Top Level would receive $10.00 ($60 less $50.)

 

If an Agents applied Rate is lower than the previous level Agents rates than an Error will be displayed in the cycle and the commission calculation cannot be processed. So, for example, if your Rates for Low, Medium, and High contracts were 35%, 30%, and 50%, when the rates for the Agent with the Medium contract would -5% (30% less 35%) and would generate an error.

 

How Locked Rates differ than Conventional Rates

When commission rates have the option for Locked Rates selected, the Commission Distribution in Policies are created with the locked rate added to the previous Agent’s rate to create a final rate. This makes the rates displayed and stored in the Commission Distribution from both sources work the same way when commissions are calculated in the cycle.

 

Why use Locked Rates? The most common reason is when an override Agent should receive a fixed rate (percentage or dollar amount.) Let us say a manager in the hierarchy is contracted to receive 10% commission. Using rates set for Conventional, if the Agent below them is set at 30%, then the contract and associated rate set at Conventional should be 40% for the manager. Then the manager would receive commissions of 40% - 30% = 10%. This works if Agents with that 30% contract rate are always below them in the hierarchy. But what if some Agents that report to him get 35%, or sometimes there is no one below him and the manager is still under contract to only receive a 10% commission? With conventional rates, when the Agent below the manager has a 35% rate, the manager would receive 5% (40% – 35%), or if there were no Agents below him, the manager would receive 40%. The Commission Distribution could be manually adjusted to make the desired rates (45% in the first case, 10% in the second case), but with Locked Rates, the system would automatically adjust and save the correct rate (40%, 45%, or 10%) in the Commission Distribution without intervention.

 

More information on Locked Rates can be found under the section for the Commission Distribution.

 

Other details on Commission Rates:

  • An import that can be used to create the Commission Rates.
  • The import has a column for Locked Rates. When left blank, or ‘N’ entered, the rates that are created will be set for conventional. If ‘Y’ is entered the rate will be set up as locked.
  • A ‘Commission Plan Rates’ report is available. It can be used to export results, make changes, and then the file can be used as an import.
  • When manually creating a Commission Rate, there is a Save and Copy feature to save a new Plan Rate and copy all data to another page. This will allow admin to edit fields and save. This will only work when first creating a Plan.
  • The List page for Commission Rates will only display records if today’s date is within the date range of the Commission Rates. To see Commission Rates with effective date ranges in the past or future, the Advanced Search needs to be used to view other date periods.
  • If a Plan Rate was previously deleted, adding it again will give you an option to reactivate it, following the newer values. Only the Issuer, Product AND Plan gets validated and retained.
  • For the full logic on how a rate is determined for calculations see the ‘Rates and Calculations’ section under Commission Calculation.

 

Commission Rates display Different Date Ranges:

If there are Commission Rates set up for the same Commissionable Product but with different date ranges, a section will be displayed in the Commission Rates that shows those other Plan Rates. Selecting one in that section will switch so the details from that other time period are displayed. This only works if the same Commission Product name is used between one year and the next. If a new Product is created and used each year, for example ‘UHC Group Medical 51+ 2022’ one year, and ‘UHC Group Medical 51+ 2023’ the next, the rates will not be tied to each other to display within this section.

 

 

Commission Rates Detail page showing ‘Rate for Different Date Range’ section.