There are many types of marketing organizations a health insurance agent can work with and just as many different acronyms to describe them. The most common ones are field marketing organization (FMO), independent marketing organization (IMO), national marketing organization (NMO), managing general agent (MGA), and general agency (GA). What do they stand for? What are their differences? The first thing to understand is there is no standard definition for any of these names that describe marketing organizations. Still, in general, they are organizations insurance companies contract with to recruit, train and support agents and agencies. It is also essential to understand that one insurance company may call a marketing organization an FMO, and another insurance company may call that same organization an IMO or GA.
The main difference between these types of organizations is the level of support they provide those agents and agencies in their downlines. A marketing organization’s downline consists of those agents and agencies they recruit to be a part of their contracting hierarchy. Generally, as you go down the hierarchy, the organizations provide fewer direct services and support. In most cases, insurance carriers have requirements concerning sales and the number of agents these organizations must work with to get a contract at each level.
These acronyms are generally organizations at the top of the hierarchy and are contracted directly with an insurance carrier. They are often used interchangeably; however, the acronym FMO is used more often with those selling health insurance products, and IMO is used with those focused on life insurance products. These organizations can sell many types of insurance and other products (health, Medicare, ancillary, life, annuities, and more) or specialize in a specific area, such as products for seniors. They work with hundreds or thousands of agents throughout the country and have the ability to contract with smaller marketing organizations and provide them overrides. They also can and do contract directly with writing agents or agencies that have no downline of their own. NMO is sometimes used as it is a more generic acronym, but again is used interchangeably.
MGAs are typically in the downline of an FMO/IMO/NMO and can also have their own downlines of agents and agencies. They also can and do contract directly with writing agents or agencies that have no downline of their own. The sales and agent requirements for MGAs are typically less than their upline would have to meet. The MGA acronym is used by both health and life insurance companies, and while this term is not generally used for the top of the hierarchy, it can be used in that way. Generally, MGAs do not provide the same level of service, training, support, marketing, and technology as an FMO/IMO/NMO would. They can, however, pass some of those things (technology products in particular) they get from their upline to their downlines. As was stated earlier, there is no industry standard for what defines an MGA.
A step further down the hierarchy, GAs are typically in the downline of an FMO/IMO/NMO or MGA. GAs can also have their own downlines in some cases but are more likely to contract directly with a writing agent or agency that has no downline of their own.
Choosing a marketing organization
So which type is right for you? Let’s evaluate.
Do you have a downline of your own?
If so, you should choose a marketing organization that can offer you an override so you can support your downline agents and grow your business.
Do you need or want extensive training or access to industry and product content?
If this is important, choose a marketing organization that can deliver that for you. Action Benefits provides our agents with exclusive access to Ensurability, a platform that delivers live and on-demand training and a robust content library of articles, job aides, and other resources.
Do you need access to technology solutions that can help grow your business?
As you evaluate marketing organizations, ask them what technology will be available to you for free. For example, will you have access to a user-friendly, multi-carrier quoting and enrollment platform? Action Benefits Coverage4One® allows you to quote and enroll in individual on-marketplace, off-marketplace, and Medicare Advantage products with multiple carriers.
What kind of day-to-day operational and sales support is provided?
This is an important question that can be answered by asking for an org chart or list of who within the organization you can call with questions, issues, or guidance. Action Benefits assigns you a dedicated account manager to provide best-in-class support and service.
What about compliance?
Compliance is critical to your business and can also be overwhelming for many agents. What support is provided when it comes to industry requirements, as well as information regarding changes and new compliance requirements? For example, when CMS came out with new 2023 call recording requirements for Medicare agents, who did you hear about it from? Does the marketing organization provide their agents with a free solution? That’s HIPAA and CMS-compliant?
What about commissions and overrides?
Ask about the organizations’ approach to commission and overrides. With Medicare Advantage, in particular, there are very specific and clear rules regarding agent commissions and who can be given an override. Unfortunately, some organizations skirt around the regulations regarding commissions and overrides, and choosing to work with them can put your entire book of business at risk.
Who owns your book of business?
When choosing a marketing organization, it is essential to ask who owns your book of business. Many agents don’t read the fine print and can end up working with a marketing organization that will actually end up owning your book of business. If you are an independent agent, make sure you ask the question and read the fine print, so you don’t unwillingly sign away your book of business for any reason.
What happens when I retire or in the case of death?
A good marketing organization will have options for you to help with any planned or unplanned circumstance. This could range from help with succession planning or an outright book of business purchase. Action Benefits works with our agents to design and provide solutions no matter the situation.