With open enrollment in full swing, the Federal Trade Commission (FTC) is cracking down on deceptive practices in the healthcare marketing space. To ensure healthcare marketing compliance, the agency recently issued warning letters to 21 unidentified companies generating health insurance leads, highlighting potentially deceptive practices that could result in legal consequences. If your business operates in this space, the message is clear: now is the time to reassess your advertising and marketing strategies to meet compliance standards.
Problematic Practices
The FTC is intensifying its oversight of healthcare-related marketing, with particular attention to how plans and services are advertised. According to the FTC, common problematic practices include:
- Overstating plan benefits or implying plans offer more comprehensive coverage than they actually do.
- Misrepresenting the type of plan offered, such as claiming limited benefit plans are equivalent to major medical insurance.
- Hiding or misstating costs, which can leave consumers with unexpected bills.
- Making false offers, like promising cash rewards or rebates for signing up.
For businesses engaged in these practices, the potential for short-term gain is significantly outweighed by the serious risk of regulatory enforcement activity. Failing to maintain healthcare marketing compliance can result in investigations and prosecutions by the FTC, the Centers for Medicare & Medicaid Services (CMS), or state authorities such as Attorneys General or insurance commissioners. These violations can lead to costly lawsuits, crippling penalties, and long-term damage to your business.
Why This Matters to Your Business
While the FTC’s warning letters are just warnings as opposed to outright accusations of wrongdoing, their primary purpose is to serve as a warning to all players in the healthcare marketing space that the FTC is watching it closely. The letters referenced several recent enforcement actions that resulted in significant penalties, including steep fines and reputational damage.
Even if your business was not among the 21 recipients of the FTC’s letters, disregarding the stark warnings they contain could lead to disaster.
Steps to Achieve Healthcare Marketing Compliance
If you market or generate leads for healthcare plans, here’s what you should do now to minimize your risk:
- Review Your Advertising: Take a hard look at your ads. Make sure everything you claim is accurate, transparent, and easy for consumers to understand.
- Double-Check your Compliance: Review the FTC rules, especially regarding disclosure requirements for costs, benefits, and limitations of plans.
- Scrutinize Partners and Affiliates: Examine the practices employed by partners and affiliates, as you could be held accountable for any rules they choose to break.
- Seek Professional Advice: A legal or compliance expert can help you spot and fix potential problems before they escalate.
The Bigger Picture
For healthcare plan marketers, open enrollment is like Black Friday for retailers, and no one wants to miss out on potential sales. However, failing to prioritize healthcare marketing compliance and encouraging violations, such as those outlined in the FTC’s warning letters, can jeopardize your company’s reputation and expose it to regulatory action with long-term consequences.
Take the FTC’s warnings seriously. Proactively ensuring healthcare marketing compliance now can protect your business from the expense, disruption, and reputational harm of an FTC investigation.
