Senate Finance Committee Chair Ron Wyden, D-Ore., and a group of senators introduced a bill –– the “Insurance Fraud Accountability Act” –– to apply criminal penalties to rogue insurance brokers who are changing Americans’ Affordable Care Act (ACA) marketplace plans without their knowledge or consent, and take other steps to strengthen consumer health insurance protections.
The bill creates new civil penalties for agents and brokers submitting incorrect information due to negligence and knowingly submitting false or fraudulent information, and criminally responsible for knowingly and willfully providing false or fraudulent information. It also creates a consent verification process for new enrollments and coverage changes, which would include notifying individuals when there has been a change in their enrollment or agent of record, and takes additional steps to bolster consumer protections and transparency.
Joshua Brooker, BSFIN, REBC, shared his insights about the bill’s provisions with the Council, helpfully cross-referenced to the page numbers for the full text of the bill. Links below Joshua's notes:
$10,000 - $50,000 per individual Civil penalty if you omit information. (we need to check if optional inputs skipped count toward omission) (PAGE 3)
Up to $200,000 per individual Civil penalty for knowingly providing false/fraudulent information. (PAGE 4)
Criminal penalties including fines pursuant to title 18 and/or 10 years of prison. (PAGE 5)
Much of this would be effective at the earlier of when HHS decides to implement it or 1/1/2028 (PAGE 5.25)
This law codifies the Broker Consent documentation. (PAGE 6.17)
Codifies pausing comp until apps are fixed (what "Member Defense Network" does). (PAGE 7.1)
Codifies the need for central hub to maintain clearing firm (what "Member Defense Network" does). (PAGE 7.9)
I'm not sure how we would comply with page 8 line 8 about reporting "chain of enrollment"
Carriers, FMO's and TPMO's will have to report all broker terminations to HHS and provide a reason for the termination.
Page 9 is a win for Medicare brokers who don't want to be lumped in as a TPMO. They separate TPMO/FMO from Agent/Broker. I don't think that TPMO and FMO should be lumped together, but getting brokers out from under that definition could be used by our Medicare brokers to push back on call recording.
Defines a best interest standard. (Does this add fiduciary liability?) (PAGE 11.3)
️Requires marketing material submission/preapproval (like Medicare now) (PAGE 12.1)
MAJOR RESTRICTION TO UNLICENSED LEAD GENERATORS
‘‘(iii) an agent, broker, field marketing organization, or third-party marketing organization— " (PAGE 11.13) ... ‘‘(VII) does not compensate any individual or organization for referrals or any other service relating to the sale of, marketing for, or enrollment in qualified health plans unless such individual or organization meets criteria described in subclauses (I) through (VI)." (PAGE 12.10)
Subclause (IV) requires that in order to legally pay a lead gen, that lead gen, that company must run all marketing by CMS and get that marketing approved. Subclause (V) says the individual/organization must be a licensed agent/broker or meet other licensure requirements set by the state.
–30– This ends Joshua's notes
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