What is the FMO Business Model?

Discussion in 'Senior Insurance Forum' started by johnnyutah, Aug 11, 2017.

  1. johnnyutah
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    johnnyutah New Member

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    First-time poster here, I'm a student working on a report about the brokerage agency industry.
    I am curious about FMOs and how their business model works. I know CMS has regulations on how much a plan can pay an agent in commissions, but how do these "override" payments to agencies work? Does this not go over the "fair market value" that plans can pay, or is it coming out of what the agent can make?
    I greatly appreciate any insight from you experts in the field!
     
  2. craig_ritter
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    craig_ritter Well-Known Member

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    Johnny,

    Admin fees are distinct from agent compensation, so admin fees (or overrides) don't reduce agent comp.

    Medicare marketing guidelines regulate both. Here is a link to MMG: https://www.cms.gov/Medicare/Health...Medicare-Marketing-Guidelines_Final072017.pdf

    120.4 covers agent compensation. 120.4.4 covers admin fees
     
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