The term “plan sponsor” is used heavily in CMS guidelines that brokers must be familiar with. (Think: Medicare Marketing Guidelines.) If you’re not familiar with the term, you might be asking yourself, “Exactly what is a plan sponsor?” Don’t worry (or waste time digging through the CMS website). Excelsior has all the information you need in this article. We’ll explain what a plan sponsor is and how they relate to brokers.
What Is a Plan Sponsor?
CMS uses the term “plan sponsor” to describe an organization that has an approved, active contract with the federal government to offer Medicare Advantage plans, prescription drug plans, and 1876 cost plans. A plan sponsor can be an employer, a union, or a health insurance carrier.
What Do Plan Sponsors Have to Do With Brokers?
For brokers, a plan sponsor is most likely the carrier he or she has contracted with. So, the plan sponsor is the company (or companies) a broker represents when selling Medicare products. Because brokers work through plan sponsors to sell Medicare products, which are contracted through the federal government, three separate entities are involved in every Medicare sale and activity. Let us explain.
CMS, Plan Sponsors, and Brokers
When it comes to Medicare, here’s a short explanation of how the federal government (specifically CMS), plan sponsors, and brokers all relate:
- CMS awards Medicare contracts, dictates federal guidelines, and enforces those guidelines.
- Plan sponsors create Medicare product packages based on federal guidelines, sell Medicare products, and facilitate the use of services detailed in their products. Plan sponsors are also responsible for following CMS guidelines, submitting information to CMS for review, and ensuring that representatives also follow CMS guidelines.
- Brokers sell Medicare products to seniors on behalf of plan sponsors.
How the Hierarchy Affects Brokers During the Medicare Marketing Season
Brokers are contracted with plan sponsors, or carriers, to sell their products. The relationship between plan sponsors and brokers is a yearlong affair. However, the Medicare hierarchy is especially poignant during marketing season. This is because the approval process for marketing materials that a broker creates will be affected by plan sponsors and CMS. Here’s an example:
- Let’s say you’ve created a brochure that compares several Medicare Advantage plans’ premiums, copays, coinsurance, and deductibles. AEP will start soon, and you’re ready to print your brochures so they’re ready for your first AEP appointments.
- Before you can share your well-planned brochure with your current enrollees, you have to submit it to the plan sponsor(s) you represent.
- From there, the plan sponsor(s) reviews your brochure. If they approve it, they will send it to CMS’s review platform. If they don’t, you may need to make changes before it gets sent to CMS.
- CMS reviews the brochure and notifies the plan sponsor(s) if it is approved.
- The plan sponsor(s) informs you that your brochure is good to go, and you can move forward with printing.
Learn More Medicare Lingo, Guidelines, and Sales Opportunities with Excelsior
Now that we’ve answered your first question—“What is a plan sponsor?”—let us show you what else we have to offer. On our online resource center, you can find language, Medicare Marketing Guidelines, and helpful articles that are vital for brokers. And as an Excelsior broker, you can access technology and training that can help you grow your business and potentially double—or triple—your income. Contact us here to learn more about what Excelsior can do for you.