Marketing Health Insurance in Wisconsin
Wisconsin’s general rule against misrepresentation applies to every line. For accident and sickness insurance, the Commissioner adds a detailed rule on advertising and sales conduct, s. Ins 3.27, Wis. Adm. Code, plus a replacement rule, s. Ins 3.29. Their stated purpose is to give buyers “clear and unambiguous statements, explanations, advertisements and written proposals” (s. Ins 3.27 (1)). They apply to anything said or published “by or on behalf of any insurer … or agent,” so they govern your website and your sales talk as much as the insurer’s brochures.
What Counts as an Advertisement (s. Ins 3.27 (5))
The definition is broad. It includes:
- material in print, radio, television, “the internet, web pages, electronic or computer presentations” and billboards;
- sales aids of every kind issued by an insurer or agent, including circulars, form letters and illustrations; and
- prepared sales talks and presentations, and what agents say when using them.
Oral statements must meet the same standard as printed ones (s. Ins 3.27 (6) (b)). The rule also distinguishes two kinds of sales advertisement:
An invitation to apply carries the heaviest disclosure duties, because the reader may decide to buy from it alone.
The Insurer Approves, and Answers for, Every Advertisement
The insurer whose policy is advertised is responsible for the content, form and distribution of every advertisement, “regardless of by whom designed, created, written, printed or used” (s. Ins 3.27 (27) (a)). It must require its agents to submit proposed advertisements for approval before use (s. Ins 3.27 (27) (b)). So a postcard you design, a landing page or a social media post describing a policy needs the insurer’s approval first.
The insurer keeps a file of every advertisement for 4 years or until its next examination report, whichever is longer, open to OCI’s inspection (s. Ins 3.27 (28)). Medicare supplement advertisements must also be filed with the Commissioner before use, and long-term care advertisements are provided to the Commissioner and kept at least 3 years (s. Ins 3.39 (15); s. Ins 3.46 (22)).
Truthful, Complete and Clear (s. Ins 3.27 (6), (9))
“Advertisements and representations shall be truthful and not misleading in fact or in implication.” OCI judges an advertisement by the overall impression it would make on a person of average education in the audience it targets, not by whether each sentence is technically true (s. Ins 3.27 (3) (f)).
Specific rules follow from that standard:
- Words such as “all,” “full,” “complete,” “comprehensive” and “unlimited” may not exaggerate a benefit.
- Phrases such as “pays your hospital bills,” “guarantees your income” or “fills the gaps in Medicare” are allowed only if literally true. Preceded by “helps,” “aids” or “assists,” they may be used fairly.
- An advertisement may not say premiums will never change unless that is true, and a low first-year premium must be shown with the renewal premium, equally prominent.
- “No waiting period” may not be claimed unless the treatment of preexisting conditions is disclosed just as prominently.
- A benefit may not be called “tax free” without an explanation of the tax rules beside it.
Identifying the Insurer (s. Ins 3.27 (12))
“The identity of the insurer shall be made clear in all of its advertisements.” An advertisement may not use a trade name, group name, parent company name, slogan or symbol in a way that could mislead about who the insurer is. It may not mimic the look of a government agency’s materials. If it lists an address other than the home office, it must state the insurer’s actual city and state of domicile.
Material about Medicare or another government program must say the insurer and agent are not connected with the program, must say it is an advertisement for insurance, and must prominently identify the insurer (s. Ins 3.27 (9) (zh)). These rules target the mailer designed to look like an official notice.
Testimonials and Endorsements (s. Ins 3.27 (13), (14))
A testimonial is a policyholder’s account of their experience; an endorsement is a statement of support from a person or organization that does not describe using the policy. Wisconsin requires:
- No paid testimonials. An advertisement may not use a testimonial or endorsement from anyone paid for it. Any other relationship between the speaker and the insurer, financial or otherwise, must be fully and prominently disclosed. Licensed Wisconsin agents and salaried announcers are excepted.
- Genuine and current. It must be real, reflect the author’s current opinion and apply to the policy advertised. It may not be used for more than 2 years without the author’s confirmation, or altered to change its meaning.
- No implied approval. An advertisement may not state or imply endorsement by any group unless it is true, must disclose any ownership ties between the insurer and an endorsing organization, and may never suggest that the insurer or its policies are approved or recommended by any state or federal agency.
Disparaging Comparisons (s. Ins 3.27 (22), (23))
An advertisement “shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits” and may not falsely or unfairly disparage competitors, their policies, their service or their way of doing business. Nor may it misstate your own insurer’s assets, financial standing, age or position in the industry. A comparison is fair only when it sets the policies side by side on the terms that matter, including the limitations of the one you sell.
Suitability (s. Ins 3.27 (7))
Marketing ends in a recommendation, and you may not recommend any individual health policy “without reasonable grounds to believe that the recommendation is not unsuitable,” after whatever inquiry is necessary. Ask about existing coverage, health needs and budget before recommending. The rule does not apply to an individual policy issued on a group basis.
Outline of Coverage (s. Ins 3.27 (5) (L), (8))
An outline of coverage is a clearly set-off summary of the benefits, the type of coverage, and the policy’s exceptions, reductions, limitations and renewal and cancellation terms. You must give one to every applicant at the time you take an application for an individual policy. An invitation-to-apply advertisement for a specific individual policy must include one too. Neither requirement applies to individual policies issued on a group basis or to conversion policies.
Replacing Health Insurance (s. Ins 3.29)
Replacement is any sale of new accident and sickness insurance where you or the insurer know, when the application is taken, that existing coverage will be lapsed or its benefits substantially reduced.
Every application asks whether the new policy will replace existing insurance. If it will, you give the applicant the Notice to Applicant Regarding Replacement of Accident and Sickness Insurance at the time you take the application, and the applicant signs it. The applicant keeps a copy and the insurer keeps a signed copy. The notice warns that:
- current health conditions may not be covered under the new policy, or may face new waiting periods;
- application questions must be answered truthfully and completely;
- the new policy is priced at the applicant’s current, higher age;
- the renewal provisions deserve review; and
- the applicant may want the current insurer’s advice before switching.
The rule does not apply to group coverage (except Medicare supplements), accident-only, single-premium nonrenewable, limited, dental-only or vision-only policies, or a conversion within the same insurer (s. Ins 3.29 (3)). Failing to follow it is treated as misrepresentation to induce a purchase (s. Ins 3.29 (8)).
The Health Insurance Risk-Sharing Plan No Longer Exists
Wisconsin once ran the Health Insurance Risk-Sharing Plan (HIRSP) for residents who could not buy coverage because of their health. The Legislature dissolved the plan and its governing authority and repealed chapter 149 of the statutes, which created it (2013 Wis. Act 20). No one can apply to HIRSP today. People with health conditions now get coverage through the Affordable Care Act protections covered earlier in the course.
Lesson summary
- Advertising rules cover agents’ websites, social media, mailers and sales talks, and oral statements must meet the same standard.
- The insurer is responsible for every advertisement of its policies and must approve agents’ advertisements before use.
- Words such as “full” or “pays your bills” are allowed only when literally true; “helps pay” may be fair.
- Every advertisement clearly identifies the insurer and never imitates a government agency.
- Testimonials must be genuine, current and unpaid, with any other relationship disclosed, and never imply government approval.
- Comparisons must be fair and complete, and competitors may not be disparaged.
- Give an outline of coverage when taking an individual application, have reasonable grounds that the policy is not unsuitable, and use the signed replacement notice whenever coverage is being replaced.
- HIRSP was dissolved and its statute repealed; it is not a current source of coverage.