Guides

Medicare Compliance Guide for Agents

Overview

Selling Medicare and Medicare Advantage plans requires strict adherence to CMS (Centers for Medicare & Medicaid Services) guidelines. Failure to comply can result in warnings, strikes, suspension, or termination from carriers—and even legal consequences. This guide covers key rules, best practices, and potential consequences to help you stay compliant and protect both your license and your reputation.

1. Why Compliance Matters

CMS Regulations: Medicare sales are federally regulated. CMS monitors agents, plans, and Field Marketing Organizations (FMOs).
Client Protection: Rules are in place to protect beneficiaries, who are often seniors or disabled, from misleading or aggressive sales practices.
Your Career: Non-compliance can lead to:
- Strikes on your record (usually 1–3 per carrier before suspension).
- Termination from carriers or FMOs.
- Loss of commissions or chargebacks.
- Revocation of your insurance license.
- Fines or other legal consequences.

2. Common Compliance Violations

Avoid the following actions to stay in good standing:

❌ Misrepresentation

Claiming a plan covers more than it does.
Saying a plan is “free” without clarifying $0 premium vs out-of-pocket costs.

❌ Unsolicited Contact

Cold-calling Medicare prospects (unless permission was given).
Visiting someone’s home uninvited.
Messaging someone through social media or texts without opt-in.

❌ Improper Marketing

Using unapproved flyers, websites, or videos.
Hosting events that feel like sales pitches during an “educational” session.
Offering gifts over $15 retail value.

❌ Enrolling Without Consent

Rushing through an enrollment without full explanation.
Changing doctors or plans without the client’s knowledge.

❌ Failing to Document Scope of Appointment (SOA)

Not collecting and storing an SOA 48 hours before an appointment (unless waived in walk-in or same-day scenarios).
Not reviewing the SOA before discussing plans.

3. Best Practices to Stay Compliant

✅ Be Transparent

Clearly explain costs, networks, and drug formularies.
Make sure your client understands copays, deductibles, and MOOP (maximum out-of-pocket).

✅ Use Carrier-Approved Materials

Only use marketing materials provided or approved by the carrier.
Don’t modify plan benefit sheets or flyers.

✅ Document Everything

Save all Scope of Appointment forms for at least 10 years.
Keep notes of calls, emails, and in-person interactions.

✅ Give Clients Time

Never pressure a client to enroll.
Encourage them to review plan documents and ask questions.

✅ Report Mistakes Immediately

If you realize you said something wrong, notify your upline or compliance team.
Honesty can protect you from worse consequences later.

4. What Happens If a Complaint is Filed?

If a client or CMS files a complaint against you:

First Complaint or Strike:
- Your FMO or carrier may call you for clarification.
- You may be asked to take retraining.
Second Strike:
- You may be suspended from selling that carrier.
- Loss of leads, commissions, or bonuses may occur.
Third Strike or Serious Violation:
- Immediate termination from the carrier.
- Potential reporting to CMS or the state DOI (Department of Insurance).

5. Red Flags That Lead to Complaints

Client says “I didn’t know I was signing up for this.”
Enrollment happens too quickly.
Plan doesn’t include their doctor or medications.
They feel rushed or misled.

Always encourage clients to review their Welcome Kit, check their provider directory, and call Member Services if unsure.

6. Final Thoughts

Compliance isn’t about slowing you down—it’s about building a solid business on trust, ethics, and transparency. If you focus on helping clients make informed decisions, your business will grow and you’ll avoid the headaches that come from complaints or penalties.

Remember:

“If you wouldn’t be comfortable with CMS listening to your appointment recording or reading your enrollment notes, don’t say it or do it.”