Medicare General Agency
This post will review all the steps and requirements needed to set up a Medicare General Agency. Medicare General Agency (GA) is a term that describes an agency with an above street level CMS Medicare contract and two or more licensed, producing sub agents. On an annual basis CMS releases the street level or max commission that an individual agent can receive for either a Medicare Advantage (MA or MAPD) or Prescription Drug Plan (PDP) sale. An agency with a GA contract can receive compensation above the street level. The additional compensation is paid as an override on every sale made from the GA or the sub agents. You can receive street level payments and the additional override in a few different ways. Read below for all the details.
How do you get a Medicare general agency contract?
To get a GA contract you need to work with an up line agency that is willing to give you a GA level contract. You must also be able to meet the carrier qualifications. Most insurance companies will require a certain number of sub agents in order to get a GA. A few examples would be; Aetna which requires 3 total contracted producers. The principal producer attached to the GA counts. So basically, you need the agency and producer connected to it and 2 sub licensed, certified, producing sub producers. The requirements vary from company to company but in general insurance carriers require anywhere from 2 to 5 licensed, certified and producing sub agents in order to get a GA.
Issues with the agency principal
One issue is with the owner/principal of the GA. In order to receive compensation, Medicare requires GAs to complete licensing and certifications. This applies to their own production as well as production from sub agents. This can be an issue when you have an owner that no longer writes business and has no desire to complete the certifications required to sell Medicare plans. If the GA is an entity, the entity must be licensed. They must also have a licensed, certified affiliated person. (Even if they are not going to sell anything. Note: If the agency is going to sell Medicare Supplements only, they will not need to take any certifications.
Compensation paying to an entity vs. an individual
A GA contract can given to an individual which would have compensation pay to the individuals bank account (They still need the require number of sub agents) or it could be an entity (LLC, S-Corp, Corporation, etc..) with the compensation paying to the entity. Again, for an entity to receive payment, they must have a licensed, certified affiliated person.
Medicare General Agency Commission payouts
Medicare GAs can receive commission pay in a few ways…
Street level direct payments- Under this set up, the street compensation would pay to the producer directly form the insurance company. This includes initial commission and renewal comp. The override would be paid directly to the agency.
LOA or Assigned Commission- All compensation (street commission and override) would pay to the agency regardless of who places the cases.
GA Contracting for principal and sub agents
We can set up GA levels for just about any company and product type. We use one contracting kit to appoint with all the various carriers. The GA and sub agents need to fill out the contracting, check off the companies they want and then fax the completed contract to us at 203-567-6253 or email to Lisa@croweandassociates.com. Please include a void check for direct deposit, E and O certificate and a valid insurance license with all contracts. If all commissions will be paying to the agency/GA, please make sure to have all sub producers fill out a commission assignment form. You can add carriers in the future carriers simply by either calling or emailing our office. There is no need to fill out additional paperwork.
Most carriers take about one week to process contracts. They will process the GA contract first and then they will process the sub agents. As a result, this may cause a delay in the processing of the sub agent’s contracts.
Important: Some carriers require the GA Principal to be contracted AND certified before they will process the sub agents contracts.
Recruiting agents and releases
If the new agents do not currently offer Medicare plans, they can easily fill out a contracting kit and get started. When you bring in agents that currently have an up-line, you will need a release in order to set them up under your agency. If the current up line will not provide a release, the agent must submit a notice to each carrier to start the waiting period to be re-contracted and moved over. Waiting periods range from 3 to 6 months depending on the company. However, agents can continue to place business during this time. Our office can provide instructions on how to notify each carrier.
RECIPROCAL RELEASE REQUEST – can be used as a release form for most carriers
Aetna Transfer-Release Form– Aetna will only accept their own release
The current up-line would need to sign the release. You can send the signed release to our office either by fax 203-567-6235 or by email to Lisa at Lisa@croweandassociates.com.
Steps after contracting and certifications are done
- The next steps is to get the training you need for the products you plan to offer. We provide full sales training, as needed, to the GA and or sub agents. Once initial training is done, it is the GA’s responsibility to train any new agents who join the agency.
- Order supplies (sales kits, brochures, applications) for the products you plan to sell. Either call our office or Pinnacle Financial Services at 800-772-6881 to order supplies. There is no cost for supplies.
- Access our online quote engine. There is no cost to access to our quote engine for Medicare, Life, Final Expense, Annuity or LTC. Go to pfsinsurance.com to access the quote site. You will need a username and password. Call Pinnacle to get your username and password.
- If you plan to add additional sub agents, you may want to come up with a strategy to recruit them. We offer a Free Medicare lead program which can be a very strong incentive to new agents. CLICK FOR FREE LEAD PROGRAM
- Connect4Medicare All agents have access to our unique online enrollment platform they can use to enroll MAPD and Medigap plans as well as PDP plans online without the need for a face to face appointment.
Existing Agencies that have added Medicare
Agencies that already have a successful business but are adding Medicare as an additional revenue stream have a huge advantage. If they have clients age 65 and over, they have an easy opportunity to provide Medicare planning for those clients. In General, people age 65 and over have either an Advantage plan or Supplement and drug plan with someone. The existing agency may as well be the broker on the cases and collect the renewal premium.