Health Insurance Incentives and Referrals: An Agent’s Guide

Compliance, General May 24, 2017 0
Health Insurance Incentives and Referrals: An Agent's Guide | Senior Market Advisors

A good salesman knows that offering additional incentives is a great way to close a deal and asking for referrals is a great way to gain leads. In the health insurance industry, those tactics are considered illegal or fraudulent activity.

As the health insurance industry grows and competition increases, you do need to find new ways to turn your leads into closed sales. There are ways for you to give incentives up to certain limits, and there ways to generate leads through referrals without directly asking for them. Here are some tips to help you use incentives and referrals to your advantage without crossing any legal lines:


Health Insurance Incentives

The Stark Law, which was enacted long before the ACA, “prohibits the knowing and willful offer, payment, solicitation, or receipt of remuneration to induce federal health care program business”(according to the APTA). This law goes above and beyond health care sales and includes situations like those where doctors use incentives to push patients towards a certain pharmacy or drug. It also means that health care agents cannot push a client towards a certain plan using incentives.

The only way you can use any kind of incentives in your insurance sales is if you carry snacks or distribute small gift cards and promotional items that value a total of less than $15. If you do that, you still can’t use those items to push a client in one direction or another. That doesn’t mean that you shouldn’t use them – keeping small snacks in your office or bringing small gifts to your appointments can make clients feel more comfortable speaking with you, which benefits them and increases your chances of closing a sale.


You can't use free food, gifts, or incentives to push clients to buy. Click To Tweet

Health Insurance Referrals 

Referrals are a bit easier to navigate than incentives. When it comes to client referrals, you cannot solicit contact information. You can, however, give your clients extra business cards and promotional swag in the hopes that they pass them on to eligible friends and family. You can’t ask your clients for leads, but you can hope that they’ll find some for you anyway.

Additionally, doctors and pharmacies are allowed to refer patients to each other’s practices, but they cannot use incentives to do so. The same applies to you. You can refer clients to a specific doctor, hospital, or pharmacy in the hope of providing them with the best care possible and keeping them within their plan’s doctor network. You cannot do so for your own financial gain.


Be careful with these compliance rules – one slip up can mean perpetual termination from the health care industry and can also include fines or imprisonment. Happy selling!

Anastasia Iliou
Anastasia Iliou
Content Marketing Manager at Senior Market Advisors
Anastasia graduated from Belmont University with a Bachelor's degree in Songwriting. When she's not writing, she's on a mission to visit all 50 states in the U.S (and to date has reached 27). Anastasia loves writing music, hiking, and her pet hedgehog, Luna. She loves animals (but not so much bugs) and spends her free time volunteering for The Elephant Sanctuary in Tennesee.