Frequently Asked Questions About Promotional Activities


Q. What is the cooling-off period?

A. Agents must clearly identify the types of products that will be discussed before marketing to a potential enrollee. To ensure beneficiaries have accurate information to make an informed choice about their Medicare benefits without being pressured, Agents initially meeting with a beneficiary to discuss specific lines of business (e.g., Medicare Supplements) must schedule a separate appointment to discuss other lines of business (e.g., Part D plans). Appointments may not be re-scheduled until 48 hours after the initial appointment. Agents may leave plan brochures regarding the other lines of business but may not discuss or conduct marketing activities related to the product. Enrollment applications may not be included in any materials provided to the beneficiary during the initial appointment.

Q. We purchased books on health maintenance that we plan to give away to anyone attending one of our marketing presentations, regardless of whether or not they enroll in our plan. Because we purchased a large number of these books, we were able to buy them at a cost of $14.99 per book. However, on the inside jacket, the retail price is shown as $19.99. May we give these books away at our marketing presentation?

A. No. The retail purchase price of the book is $19.99, which exceeds CMS's definition of nominal value.

Q. We are participating in a health fair during which we will have marketing staff present. During the fair, we will offer a number of free health screening tests to people who attend. The value of these tests, if purchased, would be considerably more than $15. Is this permissible?

A. No. You may not offer these tests for free because their value exceeds CMS's definition of nominal value.

Q. Does CMS have any restrictions on marketing or sales events planned by agents?

A. CMS requires the Company to report a month in advance any marketing or sales events scheduled by agents in which Part D will be promoted to Seniors. This includes seminars, health fairs, workshops etc. where seniors will be given information about the Part D program. If you are planning to hold or participate in such an event, please e-mail Eric Bowie, in Part D administration at ebowie@torchmarkcorp.com. Please provide your Agency or Branch name, venue name, address, phone and description, contact person name, address, phone, and e-mail.

Q.We would like to offer gifts of nominal value to people who call for more information about our plan. We would then like to offer additional gifts if they come to marketing events. Each of the gifts meets CMS's definition of nominal value, but taken together, the gifts are more than nominal value. Is this permissible?

A. Yes.

Q. Listed below are some possible promotional items to encourage people to attend marketing presentations. Are these types of promotions permissible?

A. Yes. All these promotional items are permissible as long as they are offered to everyone who attends the event, regardless of whether or not they enroll and as long as the gifts are valued at $15 or less. Cash gifts are prohibited, including charitable contributions made on behalf of people attending a marketing presentation and including gift certificates that can be readily converted to cash, regardless of dollar amount.

Q. Can a plan advertise eligibility for a raffle or door prize of more than nominal value for those who attend a marketing presentation if the total value of the item is less than $15 per person attending?

A. No. You cannot have a door prize of more than nominal value. Such gifts or prizes are prohibited by CMS. However, the raffle or door prize can exceed the $15 limit if the organization is jointly sponsoring the prize with other plans at a health fair. See discussion of Rules Pertaining to Health Fairs.

Q. What about postenrollment promotional activities? Are there any rules prohibiting such items or activities as coupon books, discounts, event tickets, day trips, or free meals to retain enrollees?

A. Plans may not offer post enrollment promotional items that in any way compensate beneficiaries based on their utilization of services. Any promotional activities or items offered by plans, including those that will be used to encourage retention of members, must be of nominal value, must be offered to all eligible members without discrimination, and must not be in the form of cash or other monetary rebates. The same rules that apply to pre enrollment promotional activities apply to post enrollment promotional activities.

Q. Can plans provide incentives to current members to receive preventive care and comply with disease management protocols?

A. Yes, as long as the incentives are:

NOTE: If these products are in the CMS-approved plan Benefit Package (Bid and PBP) under "Preventive Services," the provision of such incentives are within the purview of the medical management philosophy of the PDP and do not require additional review by CMS for marketing accuracy/compliance. Thus, the nominal value rule does not apply.

Q. Can a plan offer reductions in premiums or enhanced benefits based on the length of a Medicare beneficiary's membership in the plan?

A. No. Longevity of enrollment is not a basis for reductions in premium or enhanced benefits.

Q. Can a plan provide discounts to beneficiaries who prepay premiums for periods in excess of 1 month?

A. No. plans cannot provide any discounts to Medicare beneficiaries for prepayment of premiums in excess of 1 month.

Q. Can a plan take people to a casino or sponsor a bingo night at which the member's earnings may exceed the $15 nominal value fee?

A. No. The total value of the winnings may not exceed $15 and the winnings cannot be in cash or an item that may be readily converted to cash.

Q. Can plans send a $1 lottery ticket as a gift to prospective members who request more information?

A. Offering a $1 lottery ticket to prospective members violates the "no cash or equivalent" rule discussed above, whether or not the person actually wins since, generally, the "unscratched" ticket has a cash value of $1.

Q. Can a plan pay beneficiaries that sign up to be "ambassadors" a flat fee for transportation?

A. The plan may reimburse the beneficiary for any actual, reasonable transportation costs but must not pay the beneficiary a flat fee for transportation. If the plan employs a beneficiary to be an "ambassador", and travel reimbursement is part of a bona fide employment arrangement, then CMS has no oversight of this issue.

Q. Can organizations that own nursing homes conduct health fairs and distribute enrollment forms to nursing home residents?

A. Yes, organizations that own nursing homes may conduct health fairs and distribute enrollment forms if the sales presentations are confined to a common area (e.g., community or recreational rooms), or if a member volunteered for an individual presentation. Promotional activities and sales presentations cannot be made in individual resident rooms without a prior appointment for a "home" visits. Such activities would be considered door-to-door solicitation and are prohibited. The organization is required to meet all health fair/sales presentation and enrollment requirements as currently outlined in this section and regulations.

Q. Can physician groups that contract with Medicare health plans hire marketing firms to cold call from non-Medicare health plan member listings?

A. Yes, as long as the marketing guidelines for provider marketing are followed.

Q. Can Medicare Part D plans use providers to identify Medicare beneficiary with certain illness or diseases for marketing purpose?

A. No, marketing must follow the HIPAA privacy requirements. Under HIPAA rule, it permits the provider to communicate freely with his/her patients about treatment options but must not disclose to entity contact information for those who have not signed the provider's HIPAA authorization.

To prevent health screening, the provider can send/mail CMS-approved marketing materials to ALL Medicare patients explaining the new Medicare Advantage product on behalf of the Medicare health plan to the extent such a mailing is otherwise permitted by state law. The materials must not contain health screening information but to the extent the materials could explain that the product is only available to individuals that are dually-eligible or that have certain illnesses or diseases, etc. The provider is responsible for ensuring that it does not violate any HIPAA rules when sending/mailing out such information to their patients.

This website is intended to provide you with information about Medicare prescription drug coverage so you can make an informed decision about how Medicare Part D can help you manage your prescription drug costs. United American Insurance Company is a Medicare-approved Part D Sponsor.