Group Benefits Standard Scale (GBSS) Commission

GBSS Commission Calculator 

10% of the first $50,000 of annual premium + 7.5% of the next $50,000 + 5% of the next $150,000 + 3% of the next $250,000 + 2% of the next $500,000 + 1% of the remainder.

Examples:

If your premium was $2,000 a month…or $24,000/year, your advisor would be paid $2,400 or approximately 10.0%

If your premium was $20,000 a month…or $240,000/year, your advisor would be paid $15,750 or approx. 6.56%

If your premium was $100,000 a month…or $1,200,000 your advisor would be paid $35,750 or approx. 2.98%


Frequently asked Questions and Answers

Is there an industry standard for the amount of commission a broker is paid?

NO.  There have been a number of  formulas used, but many tend to fail for smaller and larger groups.  The new GBSS scale tries to provide a method to calculate a midpoint for what brokers charge.

Is the “Crown Scale” from the 1980’s a good standard to use for small employer plans?

NO.  Many brokers are setting the commission for smaller groups at a flat 10, 12 or even 15% commission and disregarding the scale.  The reason is that the effort required to implement and administer plans, as well as educate and service both administrators and employees has increased dramatically.

So does the “Crown Scale” work better for larger employer plans?

NO. Many brokers have used the “Crown Scale” as a guide for calculating commission, but then multiply the result by 2 or 3 times to calculate what they will actually charge.  The new GBSS scale better reflects the increased costs, risks, inflation and overall downloading of costs to advisors.

Are all advisors required to charge commission based on this scale?

NO.  This is merely a guideline to help employers understand what many brokers are charging across the country.  Many brokers may use this scale to estimate and and then set a flat percentage amount.

Can I negotiate commission, higher or lower, with my broker/advisor?

Of course.  This is only a guideline and advisors are free to charge above or below this level.   Brokers and Consultants may also charge “Fee for Service” on top of, or instead of this scale alone.  Remember, that the lowest cost may also mean a lower level of service, education and experience.

Why is there not a standard commission range like home, auto or business insurance?

Each broker adds differing value to client relationships and as such may charge more or less than a “average”  broker.  Those specializing in employee benefits that take the time and effort to educate themselves to a superior level, or those that assist with HR functions, or plan administration, may for example, charge higher amounts than this.  As a result, there is flexibility to meet clients needs.