As more Medicare plans become non-commissionable, independent insurance agents are facing a practical business question:
If a carrier does not pay a commission, can the agent charge the client a consultation fee instead?
The answer is not automatically.
Federal rules specifically address marketing consulting fees for Medicare Advantage and Part D enrollment. At the same time, guidance issued in 2026 shows that some states may recognize a separate role for a properly licensed insurance consultant who is acting independently of a Medicare Advantage organization.
The important distinction is this: a plan becoming non-commissionable does not, by itself, give an insurance agent permission to charge the beneficiary.
Before adopting a fee-based model, agents need to look at federal Medicare rules, state insurance law, their relationship with the plan, licensing requirements, carrier contracts, and how the service is actually being provided.
Compliance note: This article is for educational purposes and is not legal advice. Requirements may vary by state, carrier, contract, product, and individual circumstances. Verify any fee arrangement with the applicable state department of insurance, carrier, FMO, and qualified compliance or legal counsel before implementation.
Independent insurance agents invest significant time in helping clients evaluate Medicare coverage.
A typical review may involve comparing premiums and cost sharing, checking prescription drugs and formularies, confirming providers and pharmacies, explaining plan differences, reviewing benefits, and helping a client understand enrollment options.
Historically, agents serving the Medicare market have generally been compensated by carriers for eligible enrollments rather than charging beneficiaries directly.
But that business model becomes more complicated when a carrier designates a plan as non-commissionable.
The work involved in helping the client may remain substantial even when the carrier pays no commission.
That naturally raises the question of whether agents can move toward a client-paid advisory model.
The first thing to understand is that carrier compensation and permission to charge the beneficiary are separate issues.
A $0 carrier commission does not automatically create a right to invoice the client.
For Medicare Advantage, one of the most important provisions is 42 CFR § 422.2274(c)(8).
The regulation requires Medicare Advantage organizations to ensure beneficiaries are not charged marketing consulting fees when considering enrollment in Medicare Advantage plans.
The regulation also defines the role of agents and brokers representing Medicare Advantage organizations broadly. Representation can include selling plans, conducting outreach to existing or prospective beneficiaries, and answering—or potentially answering—questions from beneficiaries.
That means an agent should not assume that changing the description of a charge to a “consulting fee,” “service fee,” or “planning fee” necessarily changes how the activity will be viewed.
The substance of the relationship matters.
If the agent is representing a Medicare Advantage organization and the fee relates to helping the beneficiary consider enrollment in that organization's plan, the federal prohibition is directly relevant.
The Medicare Advantage regulation does not create a general exception simply because a carrier chooses not to pay a commission.
That is one of the most important takeaways for agents dealing with non-commissionable plans.
Non-commissionable does not mean fee-eligible.
The fact that a carrier pays $0 for an enrollment is not enough, by itself, to determine whether a beneficiary-paid fee is permissible.
Medicare Part D has a parallel requirement.
Under 42 CFR § 423.2274(c)(8), Part D sponsors must ensure beneficiaries are not charged marketing consulting fees when considering enrollment in Part D plans.
The Part D regulation also applies requirements to agents and brokers representing Part D sponsors and defines representation to include activities such as selling, outreach, and answering beneficiary questions.
So an agent encountering a non-commissionable Prescription Drug Plan should use the same caution.
A carrier declining to pay commission does not automatically authorize the agent to shift that expense to the client.
A significant development came on August 5, 2026, when the Oklahoma Insurance Department issued Bulletin No. 2026-03 addressing consulting fees related to Medicare Supplement and Medicare Advantage products.
The bulletin was issued specifically in response to reductions or removal of commissions in these markets.
Importantly, the Oklahoma bulletin cites a February 2026 letter from the Centers for Medicare & Medicaid Services to the Nebraska Department of Insurance.
According to the bulletin, CMS explained that the Medicare Advantage consulting-fee prohibition applies specifically to agents and brokers used by Medicare Advantage organizations to sell their plans and who are licensed and appointed for that purpose. Oklahoma interpreted that CMS communication as indicating that consulting arrangements outside that relationship may fall under state authority.
That distinction could become increasingly important.
An insurance professional may be acting in one situation as a representative of a plan and, depending on state law and licensing, in another situation as an independent insurance consultant working for the consumer.
Those are not necessarily the same legal or regulatory relationship.
Oklahoma's bulletin provides a useful example of how one state is approaching the issue, but it should not be treated as a nationwide rule.
Under Oklahoma's framework, a properly licensed insurance consultant may charge a reasonable fee for advisory services when acting independently of the Medicare Advantage plan, provided the applicable conditions are satisfied.
The Oklahoma Insurance Department also addresses the potential conflict created when someone tries to represent both sides of the same transaction.
Under the bulletin's interpretation, a producer may either:
The bulletin says the producer may not receive both streams of income for the same transaction.
Again, that is Oklahoma guidance, not a rule that agents should automatically apply in every state.
But it provides an important example of how regulators may distinguish between plan representation and independent consulting.
This issue cannot be evaluated solely through CMS regulations.
States regulate insurance producer licensing and may also regulate who can act as an insurance consultant, what fees may be charged, what disclosures are required, and whether compensation can be received from multiple parties.
Depending on the jurisdiction, a fee-based advisory model may involve requirements relating to:
Agents operating in multiple states should be particularly cautious.
A fee structure allowed in one jurisdiction may not work the same way in another.
Medicare Supplement insurance, or Medigap, should not automatically be analyzed under the same rule as Medicare Advantage.
Medicare Supplement policies are generally subject to significant state insurance regulation, including producer licensing and compensation requirements.
The Oklahoma bulletin, for example, specifically discusses consulting fees related to both Medicare Supplement and Medicare Advantage products under Oklahoma law.
That does not mean the same arrangement is permitted everywhere.
Agents considering fees for Medicare Supplement guidance should review the rules in each state where they intend to offer the service.
The issue can become even more complicated when one client meeting involves several product categories.
For example, an agent might discuss Medicare Supplement coverage and a standalone Part D plan during the same consultation. A fee structure that may be permissible for one part of that interaction could raise additional questions when Part D plan consideration or enrollment is involved.
This deserves particular caution.
Trying to collect a client-paid advisory fee while also receiving carrier compensation connected with the same transaction may create regulatory, contractual, and conflict-of-interest issues.
State laws may impose restrictions or disclosure requirements on dual compensation. Carrier or FMO agreements may impose additional limitations.
The Oklahoma bulletin takes a particularly clear position in the circumstances it addresses: the producer may not collect both consulting compensation from the beneficiary and remuneration associated with the Medicare Advantage sale in the same transaction.
Agents should not assume that simply disclosing both sources of compensation makes such an arrangement permissible.
Verify first.
Before an agency creates a beneficiary-paid Medicare advisory service, it should be able to answer five questions.
Are you representing a Medicare Advantage organization or Part D sponsor?
Or are you operating independently on behalf of the consumer under a state-recognized insurance consultant relationship?
This distinction can be central to the analysis.
Identify whether the service concerns:
Do not assume the same rule applies to every Medicare-related product.
Review the licensing and compensation requirements in the client's state.
Questions may include:
Federal and state law are not the only considerations.
Carrier appointments, producer agreements, distribution contracts, and FMO compliance policies may also affect whether a particular arrangement is permissible.
Review the relevant agreements before implementing a fee model.
PSM has previously covered the broader relationship between CMS compensation rules and state authority, which provides useful background for this analysis. CMS Sets the Record Straight on MA Rules, Compensation, and State Authority
This may be the most important question.
Calling something an “advisory service” does not necessarily make it independent consulting.
Look at the actual work being performed.
If the activity involves marketing, recommending, selling, or helping a beneficiary consider enrollment in a plan the agent represents, applicable CMS rules remain highly relevant.
It does not.
Carrier compensation status and the legality of charging a beneficiary are two separate questions.
Changing “enrollment assistance” to “consulting” on an invoice does not automatically change the underlying regulatory relationship.
The actual activity and whom the agent represents matter.
Oklahoma's 2026 bulletin is an important development, but it applies Oklahoma law.
Agents should not assume another state has adopted the same approach.
An arrangement might appear permissible under a state licensing framework but still conflict with carrier, agency, or FMO contractual requirements.
A client-paid consulting relationship can create conflicts if the same producer also expects compensation from the plan connected with the transaction.
That structure requires careful review.
Consulting fees are only one response to changes in carrier compensation.
Independent insurance agencies may also need to evaluate the economics of how they serve Medicare clients.
That may include:
PSM's current Medicare compliance resources can help agents review the broader requirements that apply before and during the sales process. Agent Compliance Guide: Staying Compliant Before the Sale
Agents can also review current CMS compensation benchmarks through PSM's 2027 compensation update, which explains the Fair Market Value amounts CMS released for the 2027 plan year. 2027 CMS Agent & Broker Compensation Rates Announced
Can an independent insurance agent charge a client for Medicare guidance? In some circumstances, a properly structured consulting arrangement may be possible—but a plan becoming non-commissionable does not automatically make client fees permissible.
Federal Medicare Advantage rules require MA organizations to ensure beneficiaries are not charged marketing consulting fees when considering MA enrollment. Part D rules contain a parallel requirement.
At the same time, the Oklahoma Insurance Department's August 5, 2026 bulletin shows that state regulators may recognize a distinction between someone representing a Medicare Advantage plan and a properly licensed consultant working independently for the consumer.
Before charging any fee, agents should determine:
The growing number of compensation changes in the Medicare market makes this an important business issue—but it is one that should be addressed through compliance review rather than assumptions.
Independent agents looking for support with contracting, Medicare products, compliance resources, enrollment tools, and back-office support can explore PSM Brokerage's agent resources or request contracting assistance. PSM Brokerage Agent Dashboard Request Contracting Through PSM Brokerage
Federal regulations
State regulatory guidance
Related PSM resources