How to Choose an FMO

Sarah Jacobson

Choosing the right FMO is critical for Medicare agents' business success. FMOs support agents in sales, marketing, client retention, and compliance. They also help agents get appointed with each carrier in order to sell that plan.

Caroline Hou, who leads Agent Success at FairStreet, joins us today to share several factors to consider when selecting an FMO, including the software tools they offer, their reputation, commission structure, and customer service. In this post we'll explore how to choose an FMO, switching FMOs, and the release process.

How to choose the right FMO for your medicare business

Choosing the right FMO is one of the most important decisions for any Medicare agent. FMOs, or Field Marketing Organizations, are companies that support independent agents and agencies in sales, marketing, client retention, and compliance. Most insurance carriers do not contract directly with agents, so agents must work with an FMO in order to sell a particular insurance product. 

When selecting an FMO, there are several things to consider. First, agents should look at the software tools the FMO offers. Many Medicare tools can be expensive and inaccessible for independent agents, and FMOs can provide access to a quoting platform, CRM, and call recording for free. Agents should also ask their FMO what programs they have in place to help their agents grow and what kind of support they offer for enrollment questions and compliance.

Another important factor to consider is the FMO's reputation. Agents should research the FMO's track record and read reviews from other agents. It's also important to look at the FMO's commission structure and ensure that they’re being paid at street level commission, which is the maximum allowable commission for an individual agent with no downlines. 

Agents should also ask about an open release policy. This is an agreement between the agent and the FMO that whenever the agent decides to leave, their FMO will let them go freely and issue an immediate release when requested. This is not an industry standard, so be proactive and ask about the release policy before choosing an FMO.

Finally, agents should look for an FMO that offers a good customer service experience. Find an FMO that is responsive to your needs and is willing to answer questions and provide guidance quickly.

Choosing the right FMO can make a big difference in an agent's success. By doing research and asking the right questions, agents can find an FMO that meets their needs and helps them grow their business.

10 Questions to ask every FMO

Researching FMOs before making the leap can be overwhelming. Many FMOs can sound the same on their websites, so it's important to understand the difference before choosing which FMO to partner with. 

Here’s a list of questions to ask every FMO that you consider working with: 

  1. What technology do you offer?
  2. Which carrier contracts do you offer? 
  3. Will I be receiving street level commission?
  4. What is your release policy?
  5. How will my commission be paid? (Directly by the carrier or by the FMO)
  6. What marketing resources do you offer?
  7. How responsive is your agent support team?
  8. Do you have an upline above your FMO or are you top of the hierarchy?
  9. What is your contracting process?
  10. May I speak with another agent as a reference?

Agents should also consider whether a local or national FMO is right for them. Agents who are mainly operating in their immediate community should work with a local FMO, as they will understand how each health plan works with the local carriers or providers in the area. Agents who want to operate in multiple states should consider a national FMO, as they will have knowledge and expertise across multiple states. 

AEP and timing for switching FMOs

When considering a switch to a new FMO, agents should understand the AEP (annual enrollment period) blackout. During the period of October 1st through December 31st, agents are typically unable to move contracts. During this time, agents can put in an intent to transfer directly with a carrier. This is a great option for agents who don't want to contact their upline. Most carriers have a three month waiting period anyway, so agents can start the intent to transfer process with the carrier directly and by the time it's the New Year, their contract will be ready to move. Alternatively, agents can request a release from their upline and submit it to most carriers on January 1st. 

Given the blackout period, carriers are very busy with FMO switch requests in September. As a result, agents who want to move their contract before AEP should start in the summer to be safe. Agents should request an immediate release from their upline, but it is not guaranteed that they will get a release. Agents should also ask their upline what the cutoff dates are for each carrier and prioritize which carriers to start working on first. 

Making the switch to a new FMO can be a great move for agents, but it's important to understand the release process and consider the timing. By taking the necessary steps, agents can make the transition quickly and start reaping the benefits of their new FMO.

Getting a release from an FMO 

Sometimes agents may find that their current FMO isn't the best fit for them. In these cases, it is possible to switch FMOs, but it requires going through a process called the release process.

The release process begins with the agent informing their current FMO that they would like to switch. The FMO will then provide the agent with a signed document called a “release letter” indicating that this agent is free to leave that FMO for the specific carriers that you’d like to move.  

Once the paperwork is completed, the agent will submit it to their new FMO. The FMO will then contact the carrier and request that the agent's contract be transferred to the new FMO. The carrier will then process the paperwork and approve the agent to sell under the new FMO.

Luckily, you are still able to write business while you’re in the process of switching FMOs. In most cases you will retain the same writing number, but a few carriers will issue you a new writing number at the time the new FMO becomes active.

If this sounds like a lot of work, don’t worry! Find a knowledgeable and detail-oriented FMO to help you navigate this process with ease.

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