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Volume 1, No. 1 - June 2012

In The Know

- Keeping you informed is what it's all about

Laws Regarding the Recording of Phone Calls

Many businesses and other organizations record their phone calls so that they can document business transactions, train their employees, and improve customer service. It is extremely important to seek legal advice from an attorney if you are considering recording telephone calls or oral communication between parties. This article is not meant to serve as legal advice.

However, we want to remind all licensees that there are federal and state laws regarding this practice. Florida is a "two-party consent" state, which requires that all parties of a conversation must give consent when one party wants to record a phone conversation. This includes the recording or the disclosure of the contents of any wire, oral or electronic communication in Florida. Recording, disclosing, or endeavoring to disclose without the consent of all parties is a felony, unless the interception is a first offense committed without any illegal purpose, and not for commercial gain, which would be a misdemeanor. Each recorded phone call made illegally that is a felony is punishable by up to five years in prison and a maximum $5,000.00 fine.

It is considered better practice to announce at the beginning of a call that the conversation is being recorded so the other caller(s) can determine if they wish to give consent to the recording.

We recommend licensees proceed with extreme caution if you or your business engages in this practice. Every state has different laws pertaining to the recording and dissemination of recorded phone calls. If you are thinking of making recordings, it is strongly advised that you retain an attorney in your area to seek advice before doing so.

[See Chapter 934, Florida Statutes]

Alert to Agents Writing Medicare Supplement Policies

The Center for Medicare and Medicaid Services (CMS) continues to encounter situations where a Medicare Supplement agent signs up a Medicare member already enrolled in a Medicare Advantage (MA) plan into a Medicare Supplement product. As a result, the member winds up carrying two health policies; Medicare Supplement and the MA plan.

The problem arises when the agent enrolls a customer in Medicare Supplement plans with the faulty assumption that the enrollment in a supplemental policy will itself automatically cancel the customer's MA plan enrollment. In fact, the customer must proactively terminate their coverage with their MA plan. It is NOT appropriate for the agent to promise to take this action, nor does the termination from the MA plan happen automatically when the member purchases a Medicare Supplement product. Agents should be cautious not to inappropriately tell their customers they (the agent) will terminate their MA plan coverage.

When the MA enrollment remains in place after a Medicare member enrolls in a Medicare Supplement product, the member winds up paying two premiums but only the MA plan is effective, essentially "blocking" the Medicare Supplement plan from coverage because Medicare Supplement and MA plans never coordinate with each other. Medicare Supplement plans, of course, only work/coordinate with Original Medicare. The typical fix for this double enrollment by CMS is to retro-terminate the member from the MA plan due to agent or plan error. This kind of correction is made only when errors by plan or plan agents have been discovered, sometimes many months after the fact. There have been some unhappy cases where Medicare members have paid double premiums (MA plan and Medicare Supplement plans) for an extended period of time. This situation continues to happen and the monetary impact on Medicare members is sometimes significant.

Depending on the facts, the Department could pursue enforcement action against the agent for placing a consumer in this situation and may seek reimbursement of premiums from the agent in addition to other sanctions.