Health insurance agents can provide consultation to an individual who is interested in enrolling in a Medicare Advantage plan. These professionals are licensed by their respective states and must maintain industry certifications to sell Medicare Advantage plans and other health insurance products. In most cases, health insurance companies give agents commissions for each policy they sell. Consumers do not pay agents to enroll in policies. A health insurance agent’s primary responsibility is to communicate and explain plan details to consumers.
Captive Agents vs Independent Agents
There are two types of agents–captive agents and independent agents. Captive agents work for insurance carriers–or companies–as W-2 employees. Independent insurance agents are W-9 professionals who work under a multilevel hierarchy.
Insurance Agent vs Insurance Broker
In the SHOP, Medicare, and Supplemental Insurance categories, it’s common to use the term “insurance agent” to classify captive agents. Insurance brokers are the same as independent insurance agents.
Insurance brokers represent the client’s interests. Health insurance companies authorize health insurance brokers to sell their products to consumers. The broker leads clients through the process of selecting a policy for themselves or for employees. It is the insurance broker’s decision on which companies they would like to present.
A captive health insurance agent can never be an insurance broker because they are legally bound by the health insurance company to sell only that company’s health plans.
Who Independent Agents Work for
Independent agents work for themselves. They legally operate, though, under a business hierarchy. This consists of Field Marketing Organizations (FMO), Insurance Marketing Organization (IMO), National Marketing Office (NMO), Managing General Agents (MGA), and General Agents (GA).
Each type of agency organization offers different perks to independent agents. Typically, FMOs, IMOs, and NMOs are at the top of the food chain. MGAs and GAs are more “local”. Any agency must contract with insurance carriers in order to sell their insurance products.
Customer Service Obligations
Insurance agents are responsible for their clients and must go above and beyond the call of duty. It’s natural for health plan members to have questions, issues, and concerns about their health insurance, and insurance agents must provide customer support to anyone they enroll. A health insurance agent needs to respond to and address client issues, or they could find themselves facing two types of penalties if they fail to meet member requests.
First, a member is able to submit a complaint to both the health insurance company and CMS–the agency that regulates Medicare. Secondly, an unsatisfied client can use another agent to switch policies. If a member moves to another plan using a different health insurance agent, the previous agent could lose their commission.
Choosing the Right Agent
There are many options available to consumers when choosing health insurance plans. There are local agencies and larger agencies that can provide the education and support to select the right policy. Insurance agents can meet in the home or discuss options over the phone. Insurance agents can also enroll individuals telephonically and/or digitally. Additionally, consumers are able to go directly to health insurance companies ask for information about plans.