Building Hierarchy as Individual License vs. Agency License

[celiothrkn]

I am an individual Life and Health agent licensed in Texas, and I've been in personal production for 3 years. At this point, I am exploring the possibility of taking on downline agents and expanding business.

One thing that I've found peculiar is that all of the life insurance carriers tend to allow me to build a hierarchy using my individual writing code. However when I've approached health insurance carriers (either in Medicare or Obamacare), they've always asked me to incorporate a LLC, register it as an agency with a FEIN, and then build out a hierarchy under that.

Wondering what your experiences have been similar. Also curious as to why there's a discrepancy between life and health carriers, if anyone has any insight.

 

[Todd King]

I am an individual Life and Health agent licensed in Texas, and I've been in personal production for 3 years. At this point, I am exploring the possibility of taking on downline agents and expanding business.

One thing that I've found peculiar is that all of the life insurance carriers tend to allow me to build a hierarchy using my individual writing code. However when I've approached health insurance carriers (either in Medicare or Obamacare), they've always asked me to incorporate a LLC, register it as an agency with a FEIN, and then build out a hierarchy under that.

Wondering what your experiences have been similar. Also curious as to why there's a discrepancy between life and health carriers, if anyone has any insight.

There are a couple of MA Plan providers that want you to be incorporated in order to receive overwrites. Other than that, you wouldn't have to do it that way and you can simply keep it under your personal name.

Not sure who is giving you that info about the Medicare side, but other than the exception I cited above, it isn't true that you need to be incorporated.

 

[celiothrkn]

Thanks Todd. Good to know. My experience is that both Humana and Oscar require you to be incorporated.

 

[Todd King]

Thanks Todd. Good to know. My experience is that both Humana and Oscar require you to be incorporated.

I don't know about Oscar, but Humana does not require it.

 

[junkman]

An acquaintance of mine helps individuals with large claims keep the billing straight and negotiate settlements. She says Oscar is the most difficult carrier she's ever worked with.

She related where the precert process took forever and claims were denied for lack of precert even though the procedure was eventually precerted. She said Oscar lost documents and they had to be submitted multiple times.

 

[myinsurebiz]

If you plan to have more than a handful of agents - register your LLC as an Agency.

Better protection for you and your family.