Gifting is an age-old marketing tactic that just about every business — including Ritter Insurance Marketing — utilizes to build relationships with their clients (or agents!), encourage referrals, and increase brand recognition.
However, within the Medicare industry, beneficiaries are considered part of a group who is very vulnerable to predatory marketing. To combat this, the Centers for Medicare & Medicaid Services (CMS) impose strict Medicare rules for gifts like these.
Below, we explore the different kinds of gifts and the CMS guidelines on what you can compliantly give to your Medicare clients.
Interested in other ways to build client loyalty and retention? Check out The Complete Guide to Client Loyalty and Retention!
Nominal Value Gifts
Let’s start here: Cash may be “king,” but it’s not an acceptable nominal gift.
Monetary nominal gifts, including cash and rebates, are strictly prohibited. There can be a fine line between a gift and a bribe. (Bribery is definitely NOT recommended for any ethical business!)
Monetary nominal gifts, including cash and rebates, are strictly prohibited.
The Department of Health and Human Services (HHS) and Office of Inspector General (OIG) provided that the value of nominal gifts cannot be larger than $15 per item and cannot exceed $75 per person per year.
Gift Cards
Gift cards can be an acceptable nominal gift for Medicare beneficiaries. However, there are restrictions in place.
Gift cards cannot be in the form of cash and cash equivalents. According to the U.S. Department of Health & Human Services Office of Inspector General, ‘cash’ refers to monetary payments in the form of currency, while ‘cash equivalents’ include items convertible to cash (such as a check) or items that can be used like cash, such as a general-purpose prepaid cards.
Gift cards offered by large retailers or online vendors that sell a wide variety of items (e.g., big-box stores) could easily be diverted from their intended purpose or converted to cash. Consequently, OIG considers such gift cards to be cash equivalents.
With that said, OIG considers some gift cards/vouchers to be “in-kind,” such as gift cards/vouchers that can be redeemed only for certain categories of services or items. Even a gift card to a big-box store may be allowed if the gift card is for a particular item or select categories of items.
If a gift card to a big-box store that can be used only to purchase fresh food items (e.g., produce), OIG would consider that to be an in-kind item because it is a gift card that can be redeemed for only a certain category of items.
You can use this as an opportunity to highlight local businesses.
Gift cards to smaller businesses with a specific service or item, such as a local coffee or sandwich shop, meal delivery service, gasoline, are seen as “in kind”. You can use this as an opportunity to highlight local businesses (perhaps an affinity partner!), which could help build a sense of community to aid your own business!
However, any gift cards must follow the same $15 per item, $75 per person per year rules as non-gift card items, so ensure your gift cards aren’t too high in value!
CMS-Compliant Gift Cards:
- Gas station
- Small grocery stores
- Restaurants (e.g., coffee shops, bakeries)
- Local businesses
Gifts for Event Attendees
If offering a gift to an event attendee, you must still abide by the nominal value rules. If you opt to provide this gift by holding a raffle, it’s important to note that the information you obtain to perform the raffle cannot be used for any other purpose other than the raffle or drawing.
Edible Gifts
Gifting meals is prohibited; however, you can still gift Medicare beneficiaries food. If you want your clients to have some sort of food-based gift, you can easily offer light refreshments and snacks at your various marketing events that you hold throughout the year.
CMS-Compliant Edible Gifts:
- Dried fruit and nut trays
- Gourmet popcorn
- Cookies, pastries, or other baked goods
- Coffee and tea sets
- Pretzels
- Hot cocoa mix
All these options are compliant, widely available, and low cost!
Between educational events and sales events, there are some differences to note.
Educational Events
Stick to light snacks or refreshments that are of nominal value. The nominal rule still applies to all gifts given at any educational event. You cannot give away anything that is “marketing” plans.
Sales Events
Food and refreshments are limited to only light snacks and refreshments with absolutely no meals permitted. The nominal rules still apply here as well, but you may also bring plan-specific promotional items, as well as hold raffles.
CMS-Compliant Raffle Gifts:
- Theme baskets (e.g., movie, spa)
- Gift cards (restrictions on vendor apply)
- Small-tech gadgets (e.g., portable Bluetooth speaker)
- Tickets (concerts or theater within nominal value)
Gifting Equality for all Clients
The gifts you intend to give must be suitable for any client. So, if you plan on offering something specific, make sure it would be beneficial to just about any client you have!
You cannot tie any client gifts to sales or appointments. If you’re giving a gift, you must make it available to the client or event attendees regardless of them doing business with you.
Giving gifts to your clients can seem tricky, but Ritter is here to help! Keeping your clients safe and happy is paramount, so use these guidelines to keep your business CMS compliant.
Register with Ritter to access more helpful tools, resources, and information so your business is the best you can make it be!
Not affiliated with or endorsed by Medicare or any government agency.
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