For this week’s Thursday Thoughts* we wanted to address common questions agents are asking us in regards to Medicare and Medicare Supplements. Many of our agent’s most frequently asked questions are focused on Open Enrollment and Guaranteed Issue.
Q: Why does it matter if I say Open Enrollment or Guaranteed Issue?
A: Many agents (even those that have been in the business for years) like to use these two terms interchangeably. A lot of that confusion comes down to the fact that at the end of the day, whether it’s an Open Enrollment Case, or a Guaranteed Issue case their client is getting a plan without having to answer medical questions or go through medical underwriting. It’s all the steps in the middle that make the real difference.
Q: My client doesn’t need to answer medical questions on this app, what will my commissions be on this case?
A: The answer depends on whether the client is in an Open Enrollment Period or a Special Enrollment Period. Both are guaranteed issue plans (no underwriting) but the difference depends on the client’s situation.
Open Enrollment Period defined:
- A six-month period where the client can buy any Medicare Supplement policy without being denied
- Begins the first month the client signs up for Medicare Part B and is turning age 65 or older
- During this period the client will not be denied for a Medicare Supplement policy, or, be charged more due to health problems.
Mr. Lewis is turning 65, signs up for Part B and wants to sign up for a Medicare Supplement plan. He is within the six-month Open Enrollment period and can choose any plan available without being underwritten.
In this scenario, the agent will be paid the full commission because Mr. Lewis is a guaranteed issue within the Open Enrollment period.
Q: What does Guaranteed Issue mean?
A: With guaranteed-issue protections, clients have the right to enroll in any Medicare Supplement plan offered in their service area, regardless of health status or pre-existing conditions. In addition, the Special Enrollment Period allows a client to make changes to their Medicare Advantage and Medicare Part D when certain changes happen in their lives.
Let’s take a look at a few examples to see how different Guaranteed Issue scenarios will affect your commissions.
Mr. Lewis signed up for Part B Medicare at age 65, but his wife is still working and has great health benefits. Mr. Lewis is covered under his wife’s health plan but at the age of 68 his wife retires, losing their health coverage. Now Mr. Lewis needs to sign up for a Medicare Supplement policy. He is no longer in the six-month period (when he originally signed up for Medicare Part B) so he does not qualify for Open Enrollment. Instead, he is now in the Special Enrollment Period and can only sign up for plans A, B, C, F, HiF, K or L.
Please take note that this is prior to MACRA taking effect. If Mr. Lewis signed up for Part B Medicare at the age of 65 on or after January 1st, 2020 and is no longer in his six-month Open Enrollment Period, then he can purchase Plans A, B, D, G, HiG, K or L.
Ms. Johnson is 67 and has both Medicare and a Plan N Medicare Supplement. She decides to try a Medicare Advantage Plan and is enrolled. After 30 days Ms. Johnson decides that she would like to go back to her Medicare Supplement Plan N. Because she is within the first 90 days of the Medicare Advantage Plan she can go back to a Plan N as a Guaranteed Issue.
In both of the above examples the agent’s commission will be reduced because each are Special Enrollment Period, Guaranteed Issue cases.
Mrs. Smith worked until she was 70 and will be losing her group coverage due to retirement. She needs to sign up for both Part B and a Medicare Supplement. Since Mrs. Smith is signing up for Part B now (rather than five years ago at age 65) she falls into the six-month Open Enrollment Period where her Medicare Supplement Plan will be a Guaranteed Issue.
In this final example the agent will be paid the full commission because the client still falls in the Open Enrollment Period.
In summary the Open Enrollment Period is based on the client turning age 65 and when they enroll in Part B, which is not the same as a Special Enrollment Period where, due to certain situations, insurance companies are required to offer Medicare Supplements as Guaranteed Issue. Open Enrollment commissions are top level pay, whereas Special Enrollment Period commissions are reduced or simply a onetime flat rate.
Contact Senior Benefit Services today to confirm that you are receiving the most competitive commissions in your area!
*Article Originally Posted on 5.17.2018