Around 74,000 marketplace clients have found their coverage changed without their consent. Additionally, some under-65 health agents have noticed missing health insurance commissions. CMS is quickly taking action to resolve these complaints and give agents the commissions they have rightfully earned.
While not the case for most beneficiaries or agents, it’s important to be aware of this situation and know what to do if your client’s Affordable Care Act (ACA) policy was switched without consent.
As their trusted agent, you are your client’s best advocate. There are ways for you to protect your clients, and well-earned commissions, from being targeted by other agents or call centers who may want to take advantage of them.
What Is an Unauthorized Plan Switch?
“Bad apple” agents are making illegal policy switches for ACA clients who receive their under-65 health coverage from the federal marketplace, aka HealthCare.gov. The rogue agents or marketing call centers making these switches often change an individual’s plan without the knowledge of their current agent and without informing the client of their new coverages. We assume that rogue agents and marketplace call centers deceive clients to collect the commissions.
Who Is Being Affected?
CMS has found that these unauthorized ACA plan switches are mainly affecting low-income consumers that enroll through the Federally Facilitated Marketplace (FFM). These clients qualify for $0-premium plans, which means they don’t receive a monthly premium bill that might change — making it harder to realize the switch. These clients also qualify for a rolling Special Enrollment Period (SEP), allowing them to enroll in coverage at any point of the year.
Unauthorized ACA plan switches are mainly affecting low-income consumers that enroll through the Federally Facilitated Marketplace (FFM).
According to CMS, they received 73,884 complaints of unauthorized plan changes within the first six months of 2024. They also reported that 98 percent of those complaints have been resolved.
Although these switches are not commonplace, the Centers for Medicare & Medicaid Services (CMS) is trying to address them quickly.
CMS’ Response
CMS is aware of this fraud in the marketplace and wants to protect vulnerable consumers from being taken advantage of. They’ve enacted several changes to help protect clients from unplanned switches.
Violations
CMS is monitoring accounts more closely for signs of fraud. Their current plan of action includes steps to:
- Suspend or terminate agents who make alleged fradulent or abusive actions
- Add new protections in online enrollment platforms to prevent unauthorized switches from occurring
- Impose civil monetary penalties on agents who commit fradulent or abusive conduct
Recently, CMS suspended two Enhanced Direct Enrollment platforms (benefitalign and Inshura) from processing new enrollments. These EDE platforms were suspended while the government investigates “anamolous activity” that does not follow CMS guidelines.
We recommend that agents choose an enrollment platform that is compliant with CMS guidelines and is committed to protecting clients. HealthSherpa has been a leader in creating solutions for agents and clients and preventing unauthorized plan changes.
Upon Initial Enrollment
In the marketplace final rule for 2024, CMS required agents to collect written consent and authorization before enrolling clients or changing their coverage. CMS also now masks the first six digits of Social Security numbers on HealthCare.gov and Enhanced Direct Enrollment sites. As an agent, you must follow the requirements outlined by CMS and file the required documents. Staying compliant as an agent is the best way to protect you and your clients.
Blocking Enrollment Changes
As of July 19, 2024, agents and brokers cannot make changes to a client’s enrollment unless they were previously associated with the account — the agent of record. This update applies to all agent-assisted enrollment applications across all enrollment platforms in the Federally Facilitated Marketplace, even if the agent has the name, date of birth, and state of residency of the client. It will prevent National Producer Number (NPN) switches within a particular Application ID.
Agents who submit an update to an enrollment that their NPN is not associated with will see an error message from CMS. To change the agent of record, a three-way call with the Marketplace Call Center (1-800-318-2596), client, and agent can take place to verify the authenticity and client’s consent for the change. Alternatively, clients can also make changes themselves for a quicker resolution. You can help them make the update in HealthSherpa by following this process:
- Assist the consumer with making policy updates as you normally would.
- Before submitting the updates, or when you encounter the error, send the consumer their in-progress application by finding them in your Client List and copying the Resume link.
- Ask the consumer use the Resume link to complete any additional updates and submit the application.
Remedying Overlapping Enrollments
To make unauthorized changes, rogue agents were also creating overlapping enrollments — via disconnected applications — with different NPN numbers. Going forward, CMS will run a weekly process to detect overlapping enrollments with differing NPNs and cancel the new enrollment before any commission is paid to the new agent.
Sending Cancellation Notices
CMS is distributing cancelation notices to carriers with policies that have been canceled due to fraud. Carriers that receive these notices are expected to notify clients whose policies have been canceled.
In conjunction with carriers and the Internal Revenue Service (IRS), clients will receive updated tax forms to avoid any financial consequences from changes that occurred without their consent.
Agents and consumers should report unauthorized activity upon noticing it.
How to Protect Your ACA Clients
Policyholders affected by the change in coverage don’t notice their plan has changed until they find out their doctor is no longer in network or their medication is no longer covered as it was before. Some clients aren’t finding out that their plan has changed until they’re paying a higher deductible. Clients may also have to pay back taxes if their income is misrepresented on their marketplace account.
Protect Your Clients
You are your client’s best advocate. To protect your clients from fraud, you can:
- Thoroughly educate them on their plan — its name, costs, network, and formulary
- Provide them with the resources to be able to find plan information on their own when needed
- Educate them about the current marketplace climate in case they hear something on the news or social media that’s concerning to them or misleading
- Assure them that you will not make changes without their written permission
- Ask them to contact you if they have questions or concerns about their coverage or notice fraudulent activity
Be a trustworthy agent who acts in their best interest and be transparent. Tell them that marketing agencies have created online or social media ads that are vague and promise free subsidies or $0 health insurance. Let them know these are actually the premium tax credits they’re eligible for because of their income. Knowing these vital pieces of information or having the tools to access them is one of the best ways for your clients to combat fraud.
Tell them that marketing agencies have created misleading online ads that are vague and promise free subsidies or $0 health insurance.
How to Report an Unauthorized Plan Change
If you find that a client’s plan has been changed, check that your client is aware. If they did not intend to make a change, report it to federal and state regulators. Guide your client through the process of changing their coverage to what they had before, if they’d like that coverage back.
Notify the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to report unauthorized activity on accounts of clients in the federal marketplace. You can also report fraud to other reporting agencies. Health Agents for America (HAFA) is a trade organization for insurance agents that is focused on the marketplace. They feature a Fraud Reporting tab on their website with instructions for agents on how to report fraud to the federal marketplace, state marketplace, direct enrollment platform, carriers, or the U.S. Department of Health and Human Services.
Client Protections in Action
Currently, there’s a lawsuit to prevent widespread fraud from occurring. Several individuals who were affected by an unauthorized plan change filed a lawsuit against a call center agency that changed their coverage after promising money in social media ads.
HealthSherpa has also created a third-party alliance called Member Defense Network, which aims to verify consent and rightful actions in the marketplace. Member Defense Network is made up of enrollment platforms, carriers, and agencies. The coalition has been able to restrict commissions of rogue agents from carriers that are partnered with them. Member Defense Network aims to grow the number of carriers that work with them to protect clients and fight fraud in the under-65 market.
We will continue to monitor unauthorized plan changes and client safeguards that aim to eliminate fraud.
Even though there are scams and call center agencies manipulating some clients into changing their health coverage, you are your clients’ best advocate. Take the time to educate your clients about these false advertisements and their plan details. This is the best way to prevent losing your hard-earned commissions!
Our Under-65 Sales team is aware that these scams are out there and is prepared to help agents make the proper reports if you and your clients have been affected. Become a Ritter agent if you want a team of professionals on your side to help guide you through compliance standards and tricky situations.
Editor’s Note: This was originally published in May 2024. It has been updated to include information more relevant to August 2024.
Not affiliated with or endorsed by Medicare or any government agency.
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