From January through August 2024, the Centers for Medicare & Medicaid Services (CMS) recorded 90,863 complaints from consumers whose coverage was altered without their approval. At the same time, some under-65 health agents have reported missing commission payments tied to these unauthorized changes.
Although this issue doesn’t affect most beneficiaries or agents, it’s important to stay informed and know the proper steps if a client’s Affordable Care Act (ACA) policy is switched without their permission.
CMS is actively addressing these complaints to protect consumers and ensure agents receive the commissions they rightfully earned. As your clients’ trusted advisor, you play a key role in advocating for them. Below, we’ll outline what’s happening and how you can help protect both your clients and your commissions from being targeted by aggressive agents or call centers.
What Is an Unauthorized Plan Switch?
Some “bad apple” agents have been making illegal plan changes for Affordable Care Act (ACA) clients who receive their under-65 coverage through the federal marketplace (HealthCare.gov). In many cases, these rogue agents or call centers switch clients into new plans without notifying the original agent and without the client’s knowledge. The motivation behind these actions is typically to collect the commissions associated with the new enrollment.
Who Is Affected?
According to CMS, these unauthorized switches are most common among low-income consumers who enroll through the Federally Facilitated Marketplace (FFM). Because these clients often qualify for $0-premium plans, they don’t receive a monthly bill—making it harder to notice when their coverage has been changed. In addition, they qualify for a rolling Special Enrollment Period (SEP), which allows them to be enrolled in coverage at any time during the year, making them more vulnerable to fraudulent switches.
From January to June 2024, CMS received 90,863 complaints related to unauthorized plan changes. Encouragingly, CMS reports that 98% of these cases have already been resolved.
While these situations are not the norm, CMS is taking active steps to curb the problem and protect both consumers and agents.
CMS’ Response Regarding this Issue
CMS has recognized the rise in fraudulent plan switches within the ACA marketplace and is taking strong measures to protect vulnerable consumers. To address these issues, they’ve rolled out several safeguards aimed at preventing unauthorized changes and holding bad actors accountable.
Violations and Enforcement
CMS has increased oversight and monitoring of accounts to detect fraudulent activity. Their actions include:
-
Suspending or terminating agents involved in fraudulent or abusive practices
-
Enhancing protections in online enrollment platforms to prevent unauthorized plan switches
-
Issuing civil monetary penalties against agents found guilty of misconduct
In August 2024, CMS suspended two Enhanced Direct Enrollment (EDE) platforms—Benefitalign and Inshura—after detecting “anomalous activity” that violated CMS guidelines. Both platforms remain suspended while investigations continue.
Recommendation: Choose an enrollment platform that prioritizes compliance and client protection. HealthSherpa is one example, known for creating secure solutions for agents and clients to help prevent unauthorized plan changes.
Initial Enrollment Requirements
-
Agents must obtain written consent and authorization from clients before enrolling them or updating coverage.
-
CMS now masks the first six digits of Social Security numbers on HealthCare.gov and EDE platforms for added security.
-
Staying compliant and maintaining proper documentation is the best way to protect both your business and your clients.
Blocking Unauthorized Changes
-
Agents may only update a client’s enrollment if they are already the agent of record on that application.
-
This policy applies across all enrollment platforms in the Federally Facilitated Marketplace.
-
Unauthorized attempts will trigger an error message from CMS.
Changing the Agent of Record:
-
A three-way call between the client, agent, and Marketplace Call Center (1-800-318-2596) can be used to validate consent.
-
Alternatively, clients can make updates themselves. With HealthSherpa, you can guide them by:
-
Starting the update as usual.
-
Sending the client their Resume link from your Client List.
-
Having the client complete and submit the application themselves.
-
Overlapping Enrollments
Fraudulent agents have attempted to bypass the system by creating overlapping applications with different NPNs. To combat this, CMS now runs a weekly audit to detect and cancel these duplicate enrollments before any commissions are redirected.
Cancellation Notices and Consumer Protection
-
CMS is sending cancellation notices to carriers when fraudulent policies are flagged.
-
Carriers must then inform affected clients.
-
To prevent financial harm, CMS is coordinating with carriers and the IRS so clients receive updated tax forms when changes occur without their consent.
What Agents and Clients Should Do
Both agents and consumers are encouraged to report any unauthorized activity immediately to ensure quick resolution and continued protection.
This is How to Protect Your ACA Clients
Many policyholders don’t realize their plan has been switched until they experience the consequences—such as discovering their doctor is no longer in network, a medication is no longer covered, or their deductible has unexpectedly increased. In some cases, clients only find out after receiving notice of back taxes owed due to inaccurate income information on their Marketplace account.
Protecting Your Clients
As their trusted advisor, you are your clients’ strongest defense against fraud. To safeguard them:
-
Educate thoroughly: Review the plan name, costs, provider network, and formulary so they fully understand their coverage.
-
Empower independence: Provide resources so clients know how to look up plan details on their own when needed.
-
Stay ahead of misinformation: Explain the current Marketplace environment so they can recognize misleading news or social media claims.
-
Set clear expectations: Reassure them that you will never make changes without their written consent.
-
Encourage communication: Ask them to contact you immediately if they notice unusual account activity or have concerns about their coverage.
-
Promote transparency: Warn clients about vague online ads promising “free subsidies” or “$0 health insurance.” Clarify that these are actually premium tax credits available based on income eligibility.
Giving clients the knowledge and tools to spot potential fraud is one of the best ways to protect them.
Reporting an Unauthorized Plan Change
If a client’s plan has been altered without their consent:
-
Confirm with your client whether the change was intentional.
-
If not, report the issue to federal and/or state regulators.
-
Assist the client in restoring their original plan, if that’s their preference.
How to Report:
-
Contact the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325).
-
Use the fraud reporting resources available through Health Agents for America (HAFA). Their website provides instructions for reporting to the federal or state Marketplace, direct enrollment platforms, carriers, and the U.S. Department of Health and Human Services.
Moving Forward
We will continue to monitor unauthorized plan changes closely and share updates on client safeguards designed to eliminate fraud.
While scams and call centers may attempt to mislead clients into switching their health coverage, remember that you are your clients’ strongest advocate. By taking the time to educate them on their plan details and warning them about deceptive ads, you can protect both their coverage and your hard-earned commissions.
At Essential Care, our Under-65 Sales team understands these challenges and is ready to support agents in reporting fraudulent activity. If you’re looking for a team of professionals who can guide you through compliance requirements and help navigate complex situations, consider joining us as a valued independent partner agent.
Not affiliated with or endorsed by Medicare or any government agency.
GET CONTRACTED WITH ESSENTIAL CARE INSURANCE AGENCY
For more information, please contact our office at (347) 971-3399 or send an email to rdashevskyy@essentialcare.info. Essential Care Insurance Agency provides Free Programs and Sales Tools for our Agents:
Please click on each link to learn more