What is the difference between initial and renewal compensation?
For contract years beginning with 2025, renewal compensation is paid at 50 percent of FMV; the regulation's "at or below FMV" wording for initial enrollment year compensation is written for contract years through 2024. Initial compensation applies to a beneficiary's first year in a plan (or certain employer-to-non-employer group moves), while renewal compensation applies to years after that first year, as long as the beneficiary stays in the same plan or moves to a "like plan type."
What the rule says
“Initial enrollment year compensation. For each enrollment in an initial enrollment year for contract years through contract year 2024, MA organizations may pay compensation at or below FMV.”
“MA organizations may pay either a full or pro-rated initial enrollment year compensation for:”
“A beneficiary's first year of enrollment in any plan; or”
“MA organizations must pay pro-rated initial enrollment year compensation for:”
“A beneficiary's plan change(s) during their initial enrollment year.”
“Renewal compensation. For each enrollment in a renewal year for contract years through contract year 2024, MA plans may pay compensation at a rate of up to 50 percent of FMV. For contract years beginning with contract year 2025, for each enrollment in a renewal year, MA organizations may pay compensation at 50 percent of FMV.”
“MA plans may pay compensation for a renewal year:”
“In any year following the initial enrollment year the beneficiary remains in the same plan; or”
“Renewal year means all years following the initial enrollment year in the same plan or in different plan that is a like plan type.”
Carrier and FMO rules are often stricter than CMS rules. This tool reports what CMS sources say and is not legal advice. Enrollment guidance shown is the CY 2027 version. Regulation text reflects the CY 2027 marketing rules, which apply to marketing beginning October 1, 2026.
This answer was generated by mapdbot from the sources listed below on October 2, 2026 and checked against them. Regulation text: eCFR as of 09/15/2026. It is for licensed insurance agents, is not legal advice, and does not cover carrier or FMO rules.