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How to Move your Medicare Contracts: Transfer and Release Guide

The contracting, transfer and release processes for agents and agencies is complex and time-consuming. It is critical that independent agents and agency owners understand their contracts, how the contracting process works, and how they can release their contracts effectively. In this guide, we will review how to transfer your contracts and several ways to release your current contracts.


Releasing your Contracts


Before you can move or transfer your contract to another upline (including if you are increasing your level), you must first have your contract released. The release process does not apply if you are contracting with the plan and carrier for the first time. It is important to note that your contracts do not automatically release if you haven't written business with that carrier for years. Your contracts stay active unless and until you release them!


There are two types of releases:

  • Immediate Release

  • Notice of Intent to Self-Release

Let's review these releases in more detail.


Immediate Release

An immediate release typically refers to a release from your top of hierarchy that is effective immediately. Sometimes, an immediate release may be future dated (e.g. 30 or 60 days) based on previous agreements or contracts you had with your upline. For the purposes of this guide, these will all be considered immediate releases.


Not all immediate releases are created equal. Some carriers have specific requirements on what must be included in the release paperwork. Executive FMO can help you determine what information will be needed depending on the carriers you are looking to release from and contract with.


Common mistakes that can delay your immediate release from taking effect include:

  • Release is not dated

  • Release is signed by incorrect party (for example, your immediate upline instead of top-of-hierarchy; this is carrier specific)

  • Release does not have the appropriate language of when the release is valid (e.g. effective date of release)

  • The release is expired (remember: releases are only valid for a certain time, you need to be sure to start your contracting immediately!)


Notice of Intent to Self-Release

The self-release process occurs when your upline refuses to release your contracts or sign a release. This process requires a 90 day notice.


There are several important considerations when contemplating a self release:


All carriers have specific black-out dates. The black-out date refers to when your contract would be released. Consider the following example:

  • An agent submits a 90-day NOI on August 1st and the 90 day period ends on November 1st

  • The carrier has a black-out period of September 1-December 15.

  • Because the release became effective on November 1 and this falls during the black-out period, the agent cannot be contracted during this period. In other words, they would need to wait until they are out of the black-out period (December 16) to start their new contract

Remember, contracting takes time and the release process is only the first part. In the above example, although the agent submitted the NOI outside of the black-out period, they were still blocked by it and unable to sell under that new contract for AEP.


Executive FMO can help you plan your release and contracting including developing timelines, financial projections and impact assessments. There are several methods to address these issues depending on your structure.


Transferring your Contracts


Transferring your contracts is an exciting time - this means that you are growing and able to meet the new commission levels for that carrier! This opens up more opportunities to bring on LOAs or downlines, increases your marketing support and increases your book of business valuation.


It is important to plan your transfer with your FMO. There are time restrictions on how long certain releases remain valid. If your release is expired and you have not set up a new contract, you may need to restart this process!


Once you are released from your current contract with that carrier, your FMO will issue your new contract at the appropriate level. This process is similar to the one you followed when you initially contracted. The carrier will verify your release and issue the new contract.


There are several important considerations you should keep in mind any time that you contract, whether it's an initial contract or a transfer:

  • Verify that your contract level is the one that you agreed to!

    • This is the most important consideration. Sometimes, an FMO will set your contract level to a lower rate and manually pay you the difference so you receive the agreed upon rate. While this may seem okay since you are receiving the agreed upon payment amount, this is detrimental to your book of business valuation. If you sell your book of business or agency in the future, you will lose significant amounts because the acquisition payment will be based on your contracted book value with the carrier regardless of what your FMO was paying you.

  • Do I retain my book of business?

    • It is critical to ensure that your contract is appropriately set up based on your structure.

  • Review how your commissions will be paid:

    • You should carefully review how your commissions will be paid. Many FMOs will collect your commissions and pay these to you at scheduled intervals that they set. Executive FMO never receives, handles or processes your payments. All agents and agencies contracted with Executive FMO are paid directly by the carrier or Third Party Administrator (TPA).

  • Will I receive advances on my commissions?

    • Some plans are eligible for 12, 24 or 36 month advances. These advances can provide critically needed cash flow to help you grow your agency. Advances are only provided to certain FMOs based on their financial solvency and production. Executive FMO proudly offers commission advances based on your production and plan contracts.

Verify Contract and Commission Routing & Attribution


Whenever you have moved your contract it is important to verify that policies and commissions are routing appropriately at the correct levels. Your FMO should have a dedicated verification plan in place post-contracting.


Another important consideration is to ensure that you are using correct carrier enrollment portals and links (e.g. SunFire) if you moved uplines.


Wrap Up


The release and transfer process is perhaps one of the most complicated yet important processes in the Medicare insurance industry; however, it does not need to be! As the transparent FMO, Executive FMO prides itself on helping all agents and agencies better understand the industry, their opportunities and how to grow! As a top FMO with contracts across the nation, we are available to help you succeed! If we can help you with contracting, releases or business planning, please do not hesitate to contact our team of industry experts.

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