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X12 transaction guide · Healthcare and insurance

EDI 256 Periodic Compensation

The X12 document used to report compensation data, including amounts earned, paid, adjustments and balances.

Sent by
Insurance company
Received by
Distributor, agency or producer
Standard
ANSI ASC X12

What is an EDI 256?

The EDI 256 Periodic Compensation is the ANSI X12 transaction set used to report compensation data, including compensation amounts, compensation earned, compensation paid, adjustments and balances.

Insurers pay commissions to agencies and producers on new business and renewals, with chargebacks when policies lapse early. Commission statements as data let agencies reconcile what they were paid against the policies sold and split commissions among their producers automatically. Statements can cover several producers and policies for one period, showing first-year and renewal commissions separately, along with chargebacks for policies that lapsed and the resulting net balance.

How the EDI 256 worksDiagram of the EDI 256 Periodic Compensation. Insurance company sends it to distributor, agency or producer. It usually follows 252. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BSC (Beginning Segment for Commission Sales Report and Periodic Compensation) and detail: the required N1 loop with N1 (Party Identification). 3 optional loops are listed by their first segment.How the EDI 256 worksPeriodic Compensation: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWS252Insurance ProducerAdministrationEDI 256SENDERInsurance companyRECEIVERDistributor, agency orproducer997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code PEGS … GETransaction set 256ST … SEHEADINGBSCBeginning Segment for Commission Sales Reportand Periodic Compensation+ 1 optional loop, starting with:NM1DETAILRequired loop N1 · repeats many timesN1Party Identification+ 2 optional loops, starting with:BLIENTBlue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 256. Your trading partner's implementation guide adds its own requirements.
How the EDI 256 worksDiagram of the EDI 256 Periodic Compensation. Insurance company sends it to distributor, agency or producer. It usually follows 252. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BSC (Beginning Segment for Commission Sales Report and Periodic Compensation) and detail: the required N1 loop with N1 (Party Identification). 3 optional loops are listed by their first segment.How the EDI 256 worksPeriodic Compensation: who sends it, where itfits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWS252Insurance Producer AdministrationEDI 256SENDERInsurancecompanyRECEIVERDistributor,agency orproducer997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY997Functional Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code PE (GS … GE)Transaction set 256 (ST … SE)HEADINGBSCBeginning Segment forCommission Sales Report andPeriodic Compensation+ 1 optional loop, starting with:NM1DETAILRequired loop N1 · repeats manytimesN1Party Identification+ 2 optional loops, starting with:BLIENTBlue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 256. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 256, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 256 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Reporting commissions earned and paid
  • Reporting chargebacks and adjustments
  • Supporting commission reconciliation

Where it fits in the document flow

Usually follows 252 Insurance Producer Administration
This document 256 Periodic Compensation
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 256 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BSC
  • NM1
  • N1
  • BLI
  • AM1
  • AMT
  • RPA
  • ENT
  • SE

Practical example

The 256 in practice

An agency receives commissions from ten insurers. Each month the insurers send 256 statements listing the commission for each policy, chargebacks for lapsed policies and the net payment. The agency's management system reconciles the payments and calculates each producer's share.

Implementation

Implementation considerations for the 256

  • Report commissions at policy level for reconciliation.
  • Show chargebacks and adjustments separately.
  • Reconcile statements with payments received.
  • Identify producers consistently with appointment records.

How ECOM helps

Automate the 256 with ECOM

Industry

Financial Services

Secure file transfer and B2B integration for banks and financial institutions.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

Solution

EDI Integration

Exchange X12 and EDIFACT documents with partners and integrate them directly with your ERP.

More general questions about EDI are answered in the EDI FAQ.

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