Building A Medicare Sales Agency
Building A Medicare Sales Agency: There are a number of different models you can use when you build a Medicare sales agency. This post will outline two of the more popular methods and what you need to do if you plan to build your own. While every specific detail is not listed here, we have covered the major steps to help you get your start.
- Knowledge of the sales process- While it is certainly possible to start and grow an agency without personal Medicare sales experience, the path is easier when you have some of your experience in the field. Many agency owners started off as personal producers and used their knowledge and expertise to train their sub agents. In light of that, There are a number of very large Medicare shops with owners that never sell in the field but they manage to find key people that do.
CMS puts caps on the amount paid for a sale. This regulates the amount of commission that can be paid to street level agents in each state. A general agency (GA), Master General Agency (MGA) or Senior General Agency (SGA) can receive compensation above street level. Having a GA, MGA or SGA contract allows sub agents to still be paid at street level while the agency receive the override compensation. Most carriers will pay the street level comp directly to the sub agent with the override paid to the agency. Overrides range from $15.00 to $150 per sale depending on the company and agency level. Many agents are aware of the street level compensation and are not willing to work with an agency if they will be taking a comp reduction to do so.
- LOA model– The licensed only agent model usually has the insurance carrier paying all compensation directly to the agency. The agency then pays out to the agents. This model is most often used with agencies that provide their sub agents with no cost or reduced cost leads. Agent compensation levels can vary greatly, this depends on what is being offered for leads. It is not uncommon for agents to receive compensation well below street if they get free or reduced cost leads. Agencies may or may not pay out renewals under this set up.
- The hardest part of Medicare sales is getting in front of qualified prospects. This is why most agents want access to leads. Common types of leads are shared or exclusive online leads, mail responder leads and seminar leads. Lead costs can accumulate quickly and there is no guarantee that you will close those sales. Some leads are certainly better than others but we have found that the abilities of the sales person makes the biggest difference.
- Many of the insurance carriers have gone to an online contracting model vs. using paper contracts. Agencies can also purchase online contracting systems. These systems can save a lot of time by eliminating endless amounts of paper and automatically coding the sub agents to them when they submit contracts. Agents also save time because they only need to build a profile one time and then can log in and select additional carriers as needed.
- Quoting software- Access to quoting software is a great value add for agents. This is a quick way to compare Medicare Advantage, Supplement and Rx plans in an area by simply entering a zip code. Quoting software can be a substantial monthly expense so its important to make sure agents are utilizing it.
- Everyone takes training for granted but it is important on multiple levels. A solid training program can help your new producers get up and running quickly. Training can also help non or low producing agents increase sales. Many agents in the field have had little or no sales training and would welcome the opportunity if it was available.
- Selling Advantage and Supplement Plans- Some agencies will sell only either one or the other. This strategy makes the training process easier. By focusing on one type of product, unfortunately they are losing a number of sales. Many clients only want one type of product have no interest in anything else. Other clients may need one plan over the other based on health, budget and provider choice. Medicare Advantage plans can be a chore to offer due to the need for the AHIP certification and product certifications each company requires. It is worth the effort in my opinion.
Recruiting and value-
- Regardless of how you plan to bring in new agents, it is important to have a strategy in place. Most agencies use multiple methods to bring in new producers. It is equally important to decide if you plan to recruit licensed agents, licensed agents with Medicare experience, non licensed agents or all types. Whatever the choice, the agent needs to add value to the agency.