WHAT IS AN FMO AND HOW CAN IT HELP MEDICARE AGENTS?

WHAT IS AN FMO AND HOW CAN IT HELP MEDICARE AGENTS?

What is an FMO? FMO, IMO, NMO … you may have heard these terms bandied about between your fellow insurance agents without knowing what they meant. There are so many acronyms, who can keep track?

In this case, all three describe organizations with very similar purposes. Specifically, an FMO is a Field Marketing Organization, while an IMO is an Independent Marketing Organization, and an NMO is a National Marketing Organization. So what do these organizations do? Well, the concept is simple. They market, sell and distribute insurance products for agents like you.

What is an FMO?

A Field Marketing Organization (FMO) is an organization that handles the marketing side of your business.

You know your goal. It’s to find the right Medicare policy for your clients and help them sign up. That means you want to focus your energy on growing your business. When you work with an FMO that handles Medicare policies, they can help you reach your business goals more effectively and efficiently.

Here’s a breakdown of how working with an FMO will improve your business.

#1. Provides support to you and your business

Every small business owner needs help. The product and sales consultants that work for the FMO will help you conduct market research and determine what Medicare products your clients need most. But that’s not all. Their staff can speed up your contracting process, handle commission audits and deal with licensing issues. All while you focus on selling!

An FMO is simply a great support team for your agency. When you hire an FMO, they come with specialized training for you, market-tested methods for growing your business, and even help with your most challenging cases.

#2. Offers the plans your clients want

To stay competitive in the Medicare insurance industry, you have to offer the plans your clients want. The agents and brokers with an FMO have access to the best national—and regional—health plan and insurer options. This means when you work with an FMO, you greatly increase your ability to find the right Medicare insurance plans for your senior clients.

With an FMO’s specialized and name brand carriers, you’re suddenly a whole lot more competitive!

#3. Gives you access to quoting and enrollment tools

FMOs provide you with access to advanced marketing tools. Most FMOs let you use their free CMS-approved quoting tool, so you can easily compare and contrast the prices of different types of Medicare plans for your clients. With this quote optimization, you’ll address the client’s specific and changing insurance plan needs with fewer roadblocks and challenges.

In addition, within those tools, some FMOs give you access to supplemental policies your clients might want or need.

#4. Doesn’t affect your commissions

In case you’re concerned about your commission, don’t be. There will be no reduction to your commission when you use an FMO. An FMO usually receives an override from the insurance companies they contract with to support the lead generation, advanced technology and training they provide to independent agents. Of course, this override payment from the insurance company is completely separate from your commission.

And, don’t forget, FMOs can experience chargebacks—just like you!

#5. Allows for your independence

You chose to become an independent agent, so you know you value your freedom. Don’t think that working with an FMO means giving up your agency (no pun intended!). But do your research, and find an FMO that has an Open Release Policy. Yes, you still have to sign contracts with most FMOs. But the Open Release Policy allows you to collaborate with an FMO—no strings attached.

So, what is an FMO? FMOs are here to support you. As a team of marketing consultants, FMOs provide the tools you need to achieve your mission as a Medicare agent. Contact us today for more information. Get that marketing burden off your shoulders!

What is an FMO is in the Health Insurance World

Deep Dive Into FMO for Health Insurance

The health insurance industry is complex and ever-changing, driven by evolving regulations, diverse consumer needs, and technological advancements. Within this labyrinthine landscape, Field Marketing Organizations (FMOs) serve as crucial intermediaries, bridging the gap between health insurance carriers and independent insurance agents. This article aims to provide an in-depth understanding of what an FMO is in the health insurance world, including its functions, benefits, and relevance to agents and brokers.

What is an FMO in Health Insurance?

Field Marketing Organizations, colloquially known as FMOs, occupy a unique and indispensable niche within the sprawling tapestry of the health insurance industry. While their function as intermediaries between insurance carriers and agents is often highlighted, this barely touches upon the multifaceted roles these organizations play. On the surface, one could sum up an FMO’s role as a conduit through which agents access an array of insurance products. Yet, a closer look reveals a more intricate model designed to bolster both the efficiency and effectiveness of independent insurance agents.

A Versatile Portfolio

At the cornerstone of an FMO’s offerings is a versatile product portfolio. This isn’t merely a collection of insurance policies but an intricately curated selection of products that span various carriers, each with their own set of features, advantages, and even limitations. By aligning with an FMO, agents can effectively become one-stop shops for their clients, capable of addressing a spectrum of health insurance needs, whether that’s for individuals, families, or specialized groups like senior citizens. This portfolio diversification enables agents to position themselves as trusted advisors, rather than just salespeople.

Beyond Sales: Training and Skill Development

While the product portfolio offers an immediate tangible benefit, FMOs bring long-term value through comprehensive training and skill development programs. These aren’t cookie-cutter seminars but targeted training modules that dive into the complexities of health insurance products, market trends, and selling techniques. With the health insurance landscape being subject to frequent policy changes and regulatory updates, staying informed is crucial. FMOs typically employ industry experts who craft training materials and offer insights, keeping agents up-to-date and poised to offer expert advice to clients.

Marketing and Branding Support

In today’s digitally connected world, effective marketing transcends traditional boundaries. FMOs often have dedicated marketing teams that help agents establish their brand. This can range from providing customizable marketing materials, like brochures and digital content, to even more complex services such as SEO optimization and social media strategy. Essentially, they offer agents the tools to not just reach their audience but to do so with impactful, high-quality content that converts leads into clients.

Administrative Powerhouse

One of the more underappreciated aspects of what an FMO offers lies in its administrative capabilities. Agents often find themselves bogged down with the minutiae of paperwork, compliance, and client management—a daunting workload that leaves little room for actual selling. FMOs often come equipped with robust Customer Relationship Management (CRM) systems, streamlined paperwork processes, and even dedicated support for contractual and compliance issues. These services liberate agents from administrative drudgery, allowing them to focus on client interaction, product understanding, and ultimately, sales.

The Financial Edge

Lastly, it’s essential to talk about the financial benefits, which are often the most immediate draw for many agents. FMOs often negotiate higher commission rates with carriers due to the sheer volume of business they generate. Agents affiliated with FMOs often find themselves benefiting from these higher commissions, which can make a significant difference in their overall earnings. Some FMOs even offer bonus structures for high-performing agents, adding another layer of financial incentive.

In sum, defining what an FMO is in the health insurance world requires more than a cursory glance at its basic functions. It is a multi-dimensional entity designed to uplift the capabilities of independent insurance agents in an increasingly competitive and complex landscape. From product diversification to skill enhancement, marketing acumen to administrative efficiency, and financial benefits to long-term career growth—FMOs offer a comprehensive suite of advantages that empower agents to excel.

How Jane Found Success Through an FMO

Jane was a diligent insurance agent who found herself stuck in a rut. Despite her best efforts, she was unable to grow her client base or even offer a variety of products that could meet diverse client needs. She had relationships with a couple of health insurance carriers but felt severely limited by the lack of options. It was then that she stumbled upon an FMO that promised extensive support in all aspects of her career.

Within a few months of partnering with the FMO, Jane’s career took a turn for the better. She underwent comprehensive training programs that polished her sales skills and enhanced her product knowledge. She no longer had to fret about administrative bottlenecks; the FMO took care of those. Perhaps most impressively, her product portfolio expanded exponentially. With a wider array of products, she could cater to a more diverse client base, from young adults to senior citizens. The FMO even provided her with marketing tools and strategies that significantly boosted her outreach. Today, Jane is a successful insurance agent with a thriving client base, all thanks to her decision to work with an FMO.

For example, take the case of Smith Insurance Agency, a small-scale, independent firm that faced stagnation for several years. After partnering with a reputable FMO, the agency saw a 30% growth in its customer base within just one year. The FMO not only provided a broad spectrum of insurance products for the agency to offer but also supported its sales funnel with targeted lead-generation strategies. This real-world example highlights the tangible benefits that can accrue from an FMO partnership.

FMOs and Technology: A Harmonious Partnership

In the era of digital transformation, FMOs have not been left behind. Many modern FMOs offer sophisticated technology solutions, from comprehensive Customer Relationship Management (CRM) systems to analytics dashboards that help agents track and assess their performance metrics. These tools are not just add-ons; they are integral parts of how FMOs add value to an agent’s practice.

For instance, advanced CRM systems can streamline client management, allowing agents to focus on what they do best—advising clients and selling policies. Some FMOs even offer mobile applications that facilitate on-the-go client management and policy tracking, a much-needed feature in today’s fast-paced world. Through technology, FMOs help agents keep pace with industry changes and customer expectations, offering a digital edge that is increasingly becoming indispensable.

Regulatory Landscape: Navigating the Maze with FMOs—An In-Depth Analysis

In an industry steeped in regulations, keeping track of legislative changes is not just a necessity but a full-time job in itself. Health insurance is one of the most regulated sectors in the United States. It falls under the ambit of multiple laws at both federal and state levels, including landmark legislation like the Affordable Care Act (ACA). Navigating these regulations becomes a Herculean task for insurance agents who already have to juggle between client consultations, policy explanations, and sales efforts. This is where Field Marketing Organizations (FMOs) bring unparalleled value in the form of regulatory assistance, enabling agents to concentrate on their core functions without compromising compliance.

Making Sense of Legislation

Interpreting laws related to health insurance is not a straightforward task. Regulations often contain technical jargon that requires specialized legal training to fully comprehend. FMOs bridge this gap by employing experts familiar with both the health insurance industry and its related laws. These experts dissect complex legislations into easily digestible information, cutting through the legalese to provide agents with summaries, guides, or bullet-point lists that help them understand the laws that affect their business. This service proves invaluable in helping agents comprehend how changes in legislation could impact various insurance products, premiums, or claims procedures.

Proactive Updates and Training Modules

Federal and state laws related to health insurance are not static; they evolve in response to socio-political factors and public health needs. The legislative landscape can thus shift quickly, sometimes within the span of a few months. FMOs actively monitor these changes and provide proactive updates to agents, often via newsletters, webinars, or specialized training sessions. This real-time information keeps agents ahead of the curve, equipping them with the latest regulatory knowledge to confidently guide their clients through purchasing decisions.

Legal Consultations and Compliance Checks

Another layer of regulatory support that FMOs offer comes in the form of legal consultations and compliance checks. Let’s say there’s a new rule affecting the enrollment process for Medicare Advantage plans. An FMO could organize a workshop, featuring legal experts who can elucidate the rule’s implications and guide agents through the changes needed in their operational procedures. Furthermore, many FMOs offer periodic compliance checks, which could involve auditing an agent’s practices to ensure they meet all state and federal requirements. These audits can serve as a preventive measure, helping agents rectify potential compliance issues before they become legal headaches.

The Future: Adapting to Consumer-Centric Regulations

The trend in health insurance regulation is moving inexorably toward a more consumer-centric model. This entails more transparent disclosure requirements, stronger patient protections, and more stringent oversight on policy pricing. Understanding these consumer-centric regulations is not just important for compliance but also crucial for building trust with clients. FMOs, recognizing the shift in regulatory focus, provide tools and resources aimed at simplifying these consumer-centric policies, ensuring agents can adapt their selling techniques to align with this evolving paradigm.

Challenges and Considerations: What to Keep in Mind

While FMOs offer a multitude of benefits, they are not without challenges. One of the most cited concerns is the potential for reduced independence. Because FMOs often require exclusivity or quasi-exclusivity agreements, some agents feel they are giving up some freedom to conduct business on their terms. It’s important to weigh this against the benefits to determine if it’s the right choice for your specific situation.

Moreover, always scrutinize the terms of your engagement with an FMO. Some may offer a seemingly fantastic suite of services but might recoup their costs through reduced commissions or fees. Always read the fine print and, if possible, consult with peers or mentors who have experience working with FMOs.

By delving into case studies, technology trends, and regulatory considerations, one can appreciate the complex but immensely beneficial role that FMOs play in the health insurance world. From amplifying sales to ensuring compliance, FMOs serve as multifaceted partners for insurance agents looking to elevate their careers and better serve their clients. The dynamics of what an FMO is in the health insurance world extend far beyond basic services; they encapsulate a wide range of support mechanisms designed to facilitate success in an ever-evolving industry.

How Do FMOs Get Paid?

I know what you’re thinking. Are you seriously publishing this for all the world to see? The subject of money is always touchy.

How an FMO gets paid – or how any of us gets paid – is just one of those things that’s not talked about.

But, as you can tell, we’re going there. From who pays who to chargebacks, you’re going to learn more about how FMOs get paid than you probably care to know.

What is an FMO?

An FMO is a Field Marketing Organization. Some companies also call it an IMO, or Independent Marketing Organization, but it’s still the same thing. It’s really just whatever a company wants to call it.

NMO, or National Marketing Organization, is also the same thing, but it just lets people know you have a national footprint versus a regional footprint.

Years ago, there wasn’t a market for an FMO because the insurance companies took care of it with captive agents. However, staff members require health insurance, a 401 (k), a salary, travel expenses… it gets expensive, and the insurance companies were looking for a way to get away from that model.

The reason FMOs exist is because most insurance companies got away from captive agents. (That’s also why most insurance companies are led by lawyers and actuaries.) They were looking for ways to get more distribution, so they went to people like us who had built a strong agency and said, “Why not build a marketing company?”

So that’s how New Horizons came to be, and that’s how most other FMOs came to be.

John Hockaday and Jeff Sams

How FMOs/IMOs Make Their Money

An FMO deals in volume.

An insurance company goes to an FMO and asks them to market their product. To be an FMO, you have to promise them however many millions worth of business. In exchange, that insurance company gives you a contract that’s high enough to make an override.

It’s not uncommon for an FMO to have a number they have to hit – say $4 million in production.

Does the Override Come Out of the Agent’s Commission?

The override the FMO gets doesn’t come out of what the agent gets. The insurance company pays the agent and the insurance company pays the FMO.

Is the Override Different on Different Products?

Yes, the override does fluctuate from product to product. Life products and ancillary products have a much higher override than a Medicare Supplement.

Do FMOs Get Charged Back Just Like Agents Do?

Absolutely.

The FMO is also responsible if the agent does something illegal. For example, if the agent takes an advance and never places the policies, they can run off with the advance. Guess who has to pay that back? The FMO. That’s actually happening to us right now.

That’s also why most FMOs don’t feel great about giving advances unless you’re a proven, trusted producer.

John Hockaday and Roger Bland

Why Does an FMO Deserve an Override Anyway?

An IMO or FMO ought to have a staff in place to help with contracting, accounting, and in today’s world, digital marketing. That’s what separates a true IMO from a general agency.

If they’re going to have a website, a quote engine, etc., that costs us money to produce and to keep it up and going.

The New Horizons quote engine mobile app in action.

FMOs help with leads sometimes, so lead costs, marketing campaigns, Christmas bonuses, etc.

You also have out-of-state license fees, and for every carrier, you have to pay that. For some states, if you don’t think you’re going to write much there, it isn’t worth it.

If I’m an agent out here writing, I’m asking questions like:

• Does the FMO give you contests to win where you can win additional cash?
• Does the FMO have trips you can win that are coming from the FMO?
• Do they offer training?

All those things.

If an FMO is doing all that, they deserve an override. If they do nothing, I’m not sure they do.

One of our latest initiatives is Medicare Advantage, so if you’re looking for a great Medicare Advantage FMO, we’d love to earn your business.

We offer free MedicareCENTER access, Medicare Advantage Sales Training, and tons of back-office support.

Read more: 4 Reasons to Sell Medicare Advantage With New Horizons Insurance Marketing

Why Not Become an FMO to Get the Highest Commission?

It’s no secret that a great personal producer can put a lot of money in his pocket. However, new agents can sometimes be a bit naive in their thinking.

It’s not uncommon for a new agent to say something like, “I’m going to write $30,000 in production, so I want the top contract!”

It just doesn’t work that way. To have the top contract, we’re talking in the millions.

Many personal producers are lucky to do $200,000. Most produce less than $50,000. To have a number of $3 or $5 million – that’s why an FMO can get a top contract.

It Takes Money to Grow

Quite honestly, most people don’t want to make the investment to get to that next level, which is an IMO or FMO. It’s going to cost you money to get there. An agent has to decide – am I going to get out of personal production and get into management?

A personal producer also doesn’t have to worry about all the other things you do when it comes to running an organization. However, the idea is if you can get big enough, you can make numbers you can never make on your own.

You gotta go big or go home. You can’t be a small IMO.

I remember when John and I were an MGA (Managing General Agency), and we wrote about $400,000 per year. They said, “Listen, just keep going and hiring and it won’t be long until you’ll be writing $3-4 million per year.”

I thought there was no way, but it turned out they were right.

It takes a while, and now we’re right around $20 million in Medicare Supplement production.

It’s been a good, gradual growth, and that’s thanks to all of the hard-working, motivated agents we have out in the field. If you’re reading this, thank you for helping us grow, and we sincerely value your friendship.