Industry groups urge caution in the wake of CMS action against ACA agents

Health agent organizations praised the Centers for Medicare & Medicaid Services for seeking to weed out fraud and abuse in the Affordable Care Act marketplace, but cautioned that enforcement must be based on evidence.

Last week, CMS administrator Dr. Mehmet Oz announced his agency will send Notices of Intent to Terminate ACA exchange agreements to 100 agents and brokers who submitted what he called “statistically implausible rates of PY 2026 applications without identifying applicant information, such as Social Security numbers.”

Failure to provide the exchanges with accurate information violates CMS’s regulatory standards of conduct and can be grounds for termination of agent and broker exchange agreements, a CMS spokesperson said.

CMS regularly sends Notices of Intent to Terminate to agents and brokers found to be noncompliant. Agents and brokers have 30 days to respond to the Notice of Intent to Terminate and resolve the noncompliance to CMS’s satisfaction.

If an agent or broker fails to address CMS’s concerns or does not respond within 30 days, CMS can terminate that person’s exchange agreement. That means the agent or broker would no longer be allowed to help consumers, employers or employees enroll in coverage through the exchanges.

CMS sends these notices directly to the agents and brokers it believes may have violated exchange conduct standards. The agency said it does not plan to make the individual notices public or provide copies of them.

If CMS moves forward with terminations, it will notify state regulators and share information when appropriate. Agents and brokers whose exchange agreements are terminated are added to CMS’s registration termination list at: https://data.healthcare.gov/ab-suspension-and-termination-list.

Every agent deserves due process

Health Agents for America president and CEO Ronnell Nolan said HAFA “supports every legitimate effort to eliminate fraud from the marketplace. Fraud hurts consumers, undermines trust, and damages the reputation of the thousands of ethical, hardworking agents and brokers who serve America's families every day.”

The report that CMS issued Notices of Intent to Terminate to 100 agents “demonstrates that the agency is taking enforcement seriously,” Nolan said.

“We agree that individuals who intentionally commit fraud should be investigated and held accountable in accordance with the law. However, enforcement must be based on evidence, due process, and fairness — not assumptions or automated conclusions.”

She added that “HAFA is deeply concerned that artificial intelligence or automated screening tools could be used in ways that inadvertently target legitimate agents without sufficient human review. We have seen this happen before. Several years ago, agents were accused of fraud, only to later be found innocent after their businesses, reputations, and livelihoods had already suffered irreversible harm. We cannot allow history to repeat itself.”

Nolan said every licensed professional deserves due process.

“Investigations should focus on the true bad actors—not the honest agents who dedicate their careers to serving consumers.”

Don’t penalize ethical agents and brokers

The National Association of Benefits and Insurance Professionals “supports aggressive, targeted action against bad actors who manipulate the enrollment process or submit applications without a consumer’s knowledge or consent,” NABIP senior vice president of communications Kelly Loussedes said in a social media post. “Enforcement efforts should hold those responsible for misconduct accountable without penalizing the ethical agents and brokers who serve consumers the right way.”

Loussedes said fraud and unauthorized enrollments harm consumers, erode trust in the marketplace, and undermine the work of legitimate agents and brokers. “The overwhelming majority of licensed agents and brokers work every day to help individuals and families understand their options, enroll in coverage that meets their needs, and maintain control over their healthcare decisions,” she said.

“Holding bad actors accountable protects consumers, strengthens Marketplace integrity, and preserves the trusted relationships between agents and the clients they serve,” she continued. “Marketplace integrity depends on protecting consumers while supporting the professionals who put their interests first.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].