HUMANA BULLETIN TO AGENTS Regarding Unlike Plan Changes 2/1/16 –Delayed Second Commission Payments

CMS recently provided updated guidance regarding when an agent should be paid full or pro‐rated initial year compensation. This new guidance impacts Humana’s payment process.

For unlike plan changes (e.g., MA‐PD to PDP or PDP to Cost Plan) occurring after January 1 in which there is indication that the beneficiary had prior plan history (regardless of plan type), Humana must pay pro‐rated initial compensation according to the number of months the beneficiary will be in the new plan.

For example, a beneficiary changes from a PDP to an MA‐PD effective May 1. This is considered an unlike plan type change and the report indicates that the beneficiary had prior plan history.  Humana therefore pays a pro‐rated initial compensation of 8/12 (May thru December) of the MA‐PD initial compensation rate.

Humana business departments are diligently working on the necessary system changes in order to comply with this guidance.

While Humana updates its systems, we are holding ALL second commission payments for Medicare Advantage or Prescription Drug Plans with 2/1 due dates until early March, including commissions for initial (new to Medicare) sales.

***All plans are subject to the same rule and we will likely see a delay in commission payments from other carriers.  We will keep you posted.