- On October 14, 2024
The Centers for Medicare and Medicaid Services (CMS) released a proposed version of its annual health insurance market reform regulation, the 2026 Notice of Benefits and Payment Parameters. The new proposal includes many provisions directed at health insurance agents and brokers that sell individual health insurance through the federal health insurance exchange marketplace. These provisions would only apply to the exchange marketplace in states that use the federal exchange, such as Delaware. These broker provisions would not apply to state-based exchanges like those in Pennsylvania, New Jersey, New York, and Maryland.
As background, during the 2024 individual market open enrollment period, it became clear that a flaw in the federal health insurance exchange marketplace’s technology was allowing unscrupulous actors to alter an individual’s exchange health insurance selections without their permission to gain commission payments for new enrollments. During the first six months of 2024, CMS received more than 200,000 complaints about individuals and business entities who fraudulently accessed marketplace enrollment files using their credentials as licensed health insurance producers certified to do business through the Federal Health Insurance Exchange marketplace.
To address this problem, the proposed rule includes multiple provisions intended to help CMS identify and respond to unauthorized plan switching. It also contains some updates designed to help honest and reputable health insurance agents and brokers document their authorization to act on behalf of clients.
The first change would allow CMS to pursue enforcement action against individual agents and brokers who have engaged in fraudulent action and against their agency if it is deemed that the agency is also responsible and may be directing the fraudulent actions. The proposed rule would also expand CMS’ authority to suspend an agent or broker’s ability to transact information with the federal exchange marketplace if they find an individual poses an unacceptable risk to the accuracy of Marketplace eligibility determinations, operations, applicants, and or enrollees.
Finally, the rule would update CMS’ existing model consent form for agents, brokers, and web brokers to use to document that a consumer or their authorized representative reviewed and confirmed the accuracy of their eligibility application information before their application was submitted to the Marketplace. If finalized as proposed, the updated model consent form would also include scripts that agents, brokers, and web brokers can use to document compliance with the consumer consent and consumer review and confirmation of the accuracy of their eligibility application information requirements via an audio recording.
CMS is accepting comments on this proposed rule through November 12, 2024. The Biden Administration is expected to finalize this measure before the start of the new presidential administration in January.