How Illegal is It to Have 2 Medsops?

[DS4]

The agent has no liabiliy
Every med supp asks, "do you currently have a Medicare supplement?
"if so, do you agree to cancel this plan upon approval"
If the applicant were to answer "no", then underwriting would have declined the second supp

 

[Frank Stastny]

What is your suggested protocol for agent documentation when replacing a policy Frank...? So that the agent could, if this situation presented itself in the future, prove that they instructed the client to cancel the other supp upon approval.

Form letter or other recommended approach to the client/and/or the Ins co once the new supp is approved and issued....?

I really don't know. I assume the agent did everything correctly and I'm sure he did. There is a question on every app asking if the prospect intends to cancel the policy they have and replace it with the new policy. There is also a replacement form the new client has to sign.

That should be enough.

The point I'm trying to make is that if a complaint is filed with the DOI they are not going to consider the agent is innocent even though the client signed both documents. They are going to investigate and investigate some more.

When I was captive one of the agents in the office had a similar situation happen. He sold a Med Supp to a guy who had a group plan. (It is not illegal for someone to have a group plan, keep it and take a Med Supp.) The guy said he was going to cancel the group plan, he didn't.

About three years his daughter found out he had both the group plan and a Med Supp and filed a compliant with the DOI. They put this agent through hell even though he didn't do anything wrong and it was not illegal for the guy to have both a group plan and a Med Supp. She told the DOI the agent didn't tell him to cancel the group plan.

After several months of making this guy jump through hoops recalling everything that took place both where and when the DOI finally dropped it.

Remember you asked. He was using YIO and had documented every meeting and conversation with his clients in the comment box in their record. I think what may have helped save his ass is he was able to print out all the info in the comment box with the date and time stamp of every entry and send it to the DOI as documented proof.

The short answer to your question is, if the answer to the question on the app and their signature on the replacement form and the app isn't enough I don't know what else the agent could do.

In over eighteen years of selling Med Supps I have never had anything close to this happen. Please, everyone knock on wood.

 

[cwlives]

How illegal? It is sooo illegal that the penalty is 20. years to life at the Supermax in Colorado!

You can meet Blago while you're here, although I don't think he'll be in Supermax.

 

[senior-advisor-indiana]

I really don't know. I assume the agent did everything correctly and I'm sure he did. There is a question on every app asking if the prospect intends to cancel the policy they have and replace it with the new policy. There is also a replacement form the new client has to sign.

That should be enough.

The point I'm trying to make is that if a complaint is filed with the DOI they are not going to consider the agent is innocent even though the client signed both documents. They are going to investigate and investigate some more.

When I was captive one of the agents in the office had a similar situation happen. He sold a Med Supp to a guy who had a group plan. (It is not illegal for someone to have a group plan, keep it and take a Med Supp.) The guy said he was going to cancel the group plan, he didn't.

About three years his daughter found out he had both the group plan and a Med Supp and filed a compliant with the DOI. They put this agent through hell even though he didn't do anything wrong and it was not illegal for the guy to have both a group plan and a Med Supp. She told the DOI the agent didn't tell him to cancel the group plan.

After several months of making this guy jump through hoops recalling everything that took place both where and when the DOI finally dropped it.

Remember you asked. He was using YIO and had documented every meeting and conversation with his clients in the comment box in their record. I think what may have helped save his ass is he was able to print out all the info in the comment box with the date and time stamp of every entry and send it to the DOI as documented proof.

The short answer to your question is, if the answer to the question on the app and their signature on the replacement form and the app isn't enough I don't know what else the agent could do.

In over eighteen years of selling Med Supps I have never had anything close to this happen. Please, everyone knock on wood.

I had a similar situation happen to me. A lady didn't cancel her med supp and didn't realize it for almost 2 years. DOI sent me a letter, I fired one back that said it wasn't my responsibility and that agents aren't allowed to cancel policies. That was the end of it...

 

[SportsNut]

I had a similar situation happen to me. A lady didn't cancel her med supp and didn't realize it for almost 2 years. DOI sent me a letter, I fired one back that said it wasn't my responsibility and that agents aren't allowed to cancel policies. That was the end of it...

I would say the IDOI determined that they needed to go pick on someone else that they could bully around some, after that response. They aren't used to agents sticking up for themselves... Wow, that showed them SAI. Nice going.

 

[senior-advisor-indiana]

I would say the IDOI determined that they needed to go pick on someone else that they could bully around some, after that response. They aren't used to agents sticking up for themselves... Wow, that showed them SAI. Nice going.

I was a bit worried that they might stick me with the premiums or something like that but I felt pretty confident about who's responsibility it was and I would have put up a good fight for it. IT was a nice chunk of change...
I never could understand how someone can't notice $150-$200 going out of their account every month.

 

[SportsNut]

On this tiopic of cancelling the old supp after the replacement supp is issued...

Does anyone actually assist the client in cancelling these old policies... drafting a letter for your clients signature, or other method...?

I would imagine that the business end of actually cancelling a policy might be over some of these folks heads... and they may be unable to actually know what to do or where to start to accomplish this; hence the two policies in force dilemma.

Years ago, when I was in the supp biz in 1984, I used to have a form letter for cancellation of policies, after replacement, but haven't adapted anything like that for use, yet anyway... Does anyone offer such an approach...? It seems to me to be in the vein of full service, but curious what you seasoned supp vets do here...?

 

[Enosis]

When I was captive one of the agents in the office had a similar situation happen. He sold a Med Supp to a guy who had a group plan. (It is not illegal for someone to have a group plan, keep it and take a Med Supp.) The guy said he was going to cancel the group plan, he didn't.

About three years his daughter found out he had both the group plan and a Med Supp and filed a compliant with the DOI. They put this agent through hell even though he didn't do anything wrong and it was not illegal for the guy to have both a group plan and a Med Supp. She told the DOI the agent didn't tell him to cancel the group plan.

After several months of making this guy jump through hoops recalling everything that took place both where and when the DOI finally dropped it.

I ran into this earlier today. An 87 year old lady had a Plan C ($191/mos) along with a group health and prescription plan. She called to replace her group plan that was ending after 22 years. She said the company was going to subsidize her $6,000 per year for additional coverage - was that going to be enough?

I sold her a PDP.

 

[senior-advisor-indiana]

On this tiopic of cancelling the old supp after the replacement supp is issued...

Does anyone actually assist the client in cancelling these old policies... drafting a letter for your clients signature, or other method...?

I would imagine that the business end of actually cancelling a policy might be over some of these folks heads... and they may be unable to actually know what to do or where to start to accomplish this; hence the two policies in force dilemma.

Years ago, when I was in the supp biz in 1984, I used to have a form letter for cancellation of policies, after replacement, but haven't adapted anything like that for use, yet anyway... Does anyone offer such an approach...? It seems to me to be in the vein of full service, but curious what you seasoned supp vets do here...?

I do actually have a letter drafted up that I have them sign and I fax it in now. I have still had companies say they didn't get the fax every now and then...

 

[Todd King]

I've ran across the situation of 2 med supps in force several times in my career. In every case the client was able to get their money back by sending proof of when the other supplement came in force.

I don't think the original company would be able to retain the premiums paid in simply because it is illegal to have two. Therefore, are they not collecting money on an illegal deal? If they kept the money, they would be guilty too.

With that said....the most I've helped a client get back was 11 months worth, not two years!