Can Insurance Agents Charge Medicare Consultation Fees?

Recently, insurance companies have been making Medicare Advantage and prescription drug plans non-commissionable. If this has you wondering “Can you charge a consulting fee for Medicare advice?” you’re not alone.

Nobody wants to work without payment. We understand. Still, insurance agents must be aware of federal and state laws and risks around insurance sales consulting fees.

Is Charging a Medicare Consultation Fee Legal?

We have been advising independent agents that there may be significant risk involved with charging beneficiaries a fee for assisting in the selection and enrollment into a MAPD or PDP plan. Here’s why:

1. The Code of Federal Regulations (CFR) does not provide an exception for the non-commissioned products.
2. Agents recommending a PDP plan are often selling a corresponding Medicare Supplement product. Med Supps are subject to the state insurance department’s oversight.
3. If a complaint is filed against the agent, it could potentially put the agent’s insurance license at risk. For this reason and in our opinion, the potential risks outweigh the financial benefits in charging a beneficiary.
4. The CFR is clear that agents/brokers selling MA and PDP products on behalf of insurance companies must be compensated by the carriers. These Medicare compensation rules are often stated in the producer agreement and may be subject to for-cause termination if the contracted agent is charging the beneficiary a fee.

Our view is that agents cannot charge a Medicare Part D consultant fee or Medicare Advantage consultant fee.

NABIP’s Position on Agents Charging Medicare Consulting Fees

NABIP’s position supports our view that agents cannot charge a Medicare Part D consult fee or Medicare Advantage consultant fee for assisting beneficiaries.

They’ve stated that, even if state law allows insurance consulting fees, federal law takes precedence over state law, and 42 CFR § 423.2274(c)(8) reads, “Ensure beneficiaries are not charged marketing consulting fees when considering enrollment in Part D plans.”

CR422.2274(c)(8) reads, “Ensure beneficiaries are not charged marketing consulting fees when considering enrollment in MA plans.”

How to Get Compensated When Medicare Plans Go Non-Commissionable

You’re in this business, not only to help others, but also, to earn a living selling health insurance. So, what can you do to keep earning money when Medicare plans go non-commissionable?

Not all Medicare plans are non-commissionable. You can still earn money by selling commissionable Medicare Advantage plans, when they’re the right fit for your clients. Medicare Supplements are also still paying commissions and desired by Medicare beneficiaries.

Additionally, offering ancillary insurance has always been a great way to fill in Medicare coverage gaps and earn commissions. Now it’s more necessary than ever before to diversify your product offerings and ensure you have ancillary plans in your portfolio!

You can still earn money by selling commissionable insurance products.

You could also start selling Affordable Care Act insurance if you don’t already. We discuss why offering ACA insurance is beneficial for agents selling Medicare here

The Value of Working in Your Clients’ Best Interest

As you’re navigating insurance companies reducing Medicare commissions, keep in mind your clients’ best interests.

No, helping a client enroll in a non-commissionable Medicare plan won’t earn you initial commissions — nor renewals. Yes, it will take time away from potentially commissionable sales. However, helping a client into the plan that benefits them the most will prove to them you’re (still) worth going to for assistance.

Remember, your unpaid work now could turn into paid work later. And your honesty, integrity, and work now can affect your future business.

Remember, your unpaid work now could turn into paid work later.

The client you just enrolled in a Medicare Advantage PPO plan not paying commissions? They could refer three of their Medicare eligible friends to you. Those individuals could enroll in commissionable Medicare Advantage plans or Medicare Supplements!

Ultimately, if you don’t treat a client right, another agent will; then, you haven’t just lost a commission. You’ve lost a client, cross-selling opportunities, and a valuable marketing asset for your business.

Sometimes, helping clients enroll into non-commissionable insurance plans may be worth it for their loyalty and referrals.

We expect we’ll continue to see insurance carriers announcing non-commissionable Medicare plans for the 2027 plan year. The Medicare market is still going through a reset after legislative changes and higher-than-anticipated claims and coverage usage.

As this occurs, no, agents should not charge a fee for Medicare consultations. We encourage agents to diversify their products and services and continue working in their clients’ best interest.

Ritter is actively advocating for broker compensation nationally and locally.