51-250: Anthem's New Commission Structure Effective July 1, 2011

Apr 13, 2011

Broker Commission Structure Changes- Effective July 1, 2011

Last month, to aid in counteracting premium inflation, Anthem notified you that there would be changes to the Large Group broker commissions and they wanted to provide you with a reminder regarding these changes.

July 1, 2011. Anthem Blue Cross will be introducing the following changes to the commission structure for group medical business:

For Large Group (51 - 250 employees) "pooled" new business, Anthem will include a standard 4% flat annual premium broker commission. This will be their standard approach moving forward, but will still allow for single-case agreements in the Large Group market (51+), to accommodate the compensation you negotiate directly with your clients.
As a starting point for renewals in our pool, Anthem will convert the standard percentage of premium of 5.0% flat to a 4.0% flat, effective January 1, 2012. If that amount needs to be adjusted up or down, you must notify Anthem, in writing, a minimum of 120 days in advance, so they can modify your client's renewal rates accordingly.
For 51-250 pooled business renewals on the books through GA agreements, Anthem will continue to pay renewals on a percentage of premium basis, in accordance with these agreements.
For new business through GA's, Anthem has limited the group size to 125 lives, down from 250 lives effective January 1, 2011; going forward, this new business will be paid on a 4% of premium basis as well, unless you notify Anthem in writing to modify this percentage agreed upon by you and your client.
For non-pooled, experience-rated groups with 126 or more, Anthem will continue to build in the percentage of premium negotiated between you and your client.

Specialty lines of coverage will continue to be payable on a percentage of premium basis.

All annual Form 5500 Schedule A's will continue to report all compensation to yours and Anthem's mutual clients.

Last month, Anthem Small Group Business unit announced a step-down broker compensation structure for new business, with incremental reductions that account for annual premium inflation, beginning July 1, 2011. To view that communication, please click here.

Mitigating the Rising Cost of Care
Anthem believes that mitigating premium costs is critical to continued mutual success. This approach to broker commissions will help to counteract the effects of premium inflation, now and in the future. Anthem thanks you for your business and looks forward to your continued partnership. If you have any questions or would like to discuss, please do not hesitate to contact your b&p Group Sales Representative.