CMS publishes the 2025 Medicare final rule: What health insurance agents need to know right now

Last November, CMS caused quite a stir when it released its proposed rule for 2025. Much of the hullaballoo was about agent and broker compensation. But, there are some other nuggets in here, too. What’s changed? What’s the same? Here’s our early read.

Agent and broker compensation is changing

In November, CMS expressed deep concern that excessive compensation and bonus arrangements were causing brokers to steer beneficiaries into ill-fitting plans. That concern carried over into the final rule. Here’s the gist:

You're getting a $100 raise per initial Medicare Advantage enrollment or initial Part D enrollment, And, all carriers will be paying that same flat rate. But, the devil is in the details.

CMS is wise to the fact that some carriers and Field Marketing Organizations (FMOs), have been exploiting a loophole in payment designations. No longer will bad actors be able to write off golf trips and other incentives as an "administrative" payment to an agent. Now, "compensation" is expanded to mean a clear, fixed amount that all agents and brokers will be paid per enrollment, regardless of the plan a beneficiary chooses. The amount also includes all enrollment-related activities; you'll no longer be paid separately for things like Health Risk Assessments.

CMS took great pains to remind everyone that violators of these rules may be prosecuted under the federal anti-kickback statute. All changes go into effect on October 1.

Carrier, FMO, and other upline relationships are under the microscope

We should note that each of the compensation rules above extends only to compensation received by agents and brokers. FMOs and other TPMOs aren’t – yet – subject to the same guidelines. This means many services FMOs provide will not be impacted this year.

However, beginning with the contract year 2025, carriers may not include any contract terms that would cause agents, brokers, or FMOs to steer beneficiaries to their plans. The rule specifically calls out volume-based incentives – carriers can’t incentivize FMOs to steer agents toward a plan, nor can an FMO incentivize agents to hit production targets with specific plans.

Also important – carriers and FMOs cannot pay agents to decline to represent another plan in an area.

CMS left the door wide open for additional regulation and enforcement action in this space.

The hammer comes down on lead-generation companies

CMS also said it would target lead gen, and boy, did it. TPMOs (read – lead gen companies) may only share beneficiary information with another TPMO (read – brokers, agents, or anyone else) after getting express written consent from each beneficiary. And, the consumer will need to opt-in again for each TPMO their data gets sold to.

Consumers aren’t likely to be so free with their information. If you’ve been relying on list buys to drive your business, it’s time to consider other options.

But wait, there’s more…

The rule addresses a variety of other items proposed in November, like mid-year notification of supplemental benefits, and a few rules around D-SNPs. We’ll do a deeper dive in an upcoming piece. For now, though, you can rest easier knowing that you’ll be paid more per enrollment and still get stellar support from Action Benefits.