Insurance Fraud Accountability Act
The Insurance Fraud Accountability Act aims to curb fraudulent enrollments in qualified health plans by tightening penalties on agents and brokers who provide incorrect or fraudulent information, and by strengthening verification and oversight around broker-assisted enrollments. It creates civil and criminal penalties for negligent or knowing violations, establishes a formal enrollment verification process for broker-assisted enrollments, broadens regulatory authority over field marketing organizations and third-party marketing organizations, and adds audit and reporting requirements to improve transparency and enforcement. The bill intends to reduce fraudulent enrollments while safeguarding continuity of coverage for consumers. Key new requirements include a broker enrollment verification process with consent and data-access provisions, stricter penalties for bad actor brokers, and a structured regulatory framework for downstream marketers involved in enrollments. It also requires ongoing audits and a public-facing process to identify suspended or terminated agents and brokers.
Key Points
- 1Civil and criminal penalties for brokers and agents
- 2- Civil penalties: $10,000–$50,000 for each incorrect piece of information provided by an agent or broker due to negligence or disregard.
- 3- Civil penalties for knowing violations: up to $200,000 per individual for knowingly false or fraudulent enrollment information.
- 4- Criminal penalties: fines, imprisonment up to 10 years, or both for knowingly and willfully providing false or fraudulent enrollment information.
- 5Broker-assisted enrollment verification and protections
- 6- Establish a verification process for broker-assisted enrollments in QHPs, with a deadline not later than January 1, 2029.
- 7- Require documentation showing the broker has the enrollee’s consent; tie commission payments to resolving inconsistencies in enrollment data.
- 8- Make enrollment data accessible to the qualified health plan via a database or similar resource; require timely notification of changes to enrollment, the agent of record, or premiums.
- 9- Require consumer access to account information (via website or toll-free line) and allow easier cancellation of unauthorized activity.
- 10- Brokers must report to the Secretary any third-party marketing organization involved in the enrollment chain.
- 11Regulation and oversight of marketing organizations
- 12- The Secretary may set up rules allowing states to regulate agents, brokers, field marketing organizations (FMOs), and third-party marketing organizations (TPMOs) in the enrollment chain.
- 13- By plan years after the date set by the Secretary (and no later than 2029), establish criteria requiring conduct standards (acting in enrollees’ best interests), termination reporting, licensure/registration, marketing material review, and restrictions on referral-based compensation.
- 14- Define key terms (chain of enrollment, field marketing organization, marketing materials) and require compliance with standards to participate in enrollment activities.
- 15Transparency, audits, and data sharing
- 16- Implement a process for periodic audits of agents and brokers starting by plan years after a Secretary-set date, focusing on complaints, fraud indicators, and enrollment patterns.
- 17- Allow referrals of potential fraud findings to state departments of insurance.
- 18- Create a process to regularly provide plans, Exchanges, and States with a list of suspended and terminated agents and brokers.