Referrals can be a great way to grow your Medicare insurance business, and you may want to use gifts to reward the clients who give you referrals. But watch out. CMS has strict rules governing incentives and gifts. Make sure you know what you can and can’t do.
Medicare Marketing and Gifts
CMS allows nominal gifts to be given to beneficiaries for marketing purposes, but these gifts must comply with certain rules:
- The value of a single gift can’t be more than $15 retail. There’s also a $75 aggregate limit on gifts per person, per year.
- The gifts have to be given whether or not the individual enrolls, without discrimination.
- It is permissible to provide beneficiaries with a chance to win one big gift instead of giving each beneficiary a small gift. If you choose to do this, the value of the big gift cannot be more than $15 multiplied by the number of people expected to attend a marketing event. For example, if you expect 10 people to attend your marketing event, you could have a raffle to win a prize with a value of up to $150 (10 X $15).
- You cannot give cash or monetary rebates as a nominal gift.
- You cannot give a meal as a nominal gift. Only light snacks and refreshments can be provided at marketing events.
CMS also has strict rules about what you can and cannot do to contact prospective enrollees.
- You can use email to contact prospective enrollees, but an opt-out process must be included with each email.
- You can use conventional mail and print media to contact prospective enrollees.
- You cannot cold call or text prospective enrollees, a permission to contact must be secured
- You cannot use direct messaging, including direct messaging in social media, to contact prospective enrollees.
- You cannot use door-to-door solicitation for any MA/MAPD/PDP products
Don’t Risk Non-Compliance
Breaking Medicare’s marketing rules could lead to big consequences and even put your career in jeopardy. Don’t risk it.
- Review the Revised Medicare Communications and Marketing Guide and MCMG Release Memo for more information on what is and is not allowed. Marketing guidelines may be updated each year, so review the most recent guidelines and look for new and updated information.
- You can ask for referrals, but do not ask for or accept phone numbers. Calling a prospective enrollee, even one who is referred by a friend, is considered an unsolicited telephonic communication and is prohibited under the marketing guidelines. If a client would like to make a referral, CMS recommends that you provide a business card for your client to give to the other person, so that person can contact you.
- Do not announce that you will provide gifts for referrals. When providing gifts, comply with all the rules for nominal gifts.
If you have any questions about compliance, contact us. We’re here to help!