Health insurance agents who provide false or fraudulent information on Affordable Care Act health plan enrollment forms could face criminal fines of up to $200,000 and up to 10 years in prison if a new bill introduced in the US Senate Committee on Finance becomes law.
Each application containing fraudulent information would be subject to these fines.
According to a statement from Sen. Ron Wyden (D-Ore.), finance committee chair, “rogue brokers” use misleading advertising, such as promoting free government subsidies, to target low-income individuals and enroll them in plans without their permission.
In some cases, brokers change a policyholder’s plan without obtaining consent, leading to uncovered medical expenses and unexpected tax liabilities.
“It is critical for these bad actors to be held criminally responsible and implement common sense consumer protections so working families can confidently purchase quality, affordable health insurance that works for them through honest brokers,” Wyden said. “The solution to fraud is to go after fraudsters, not to take away middle-class tax credits for health care.”
The bill also establishes civil fines ranging from $10,000 to $50,000 for agents and brokers who provide incorrect information due to negligence or disregard for federal law. Each fraudulent application would incur these fines.
If passed, the new law would require the development of a consent-verification process for new enrollments and any coverage changes. This process would include notifying policyholders when changes to enrollment, agent of record, or tax subsidy are made.
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Agents and brokers would also be subject to audits to investigate complaints and enrollment patterns that suggest fraud. Qualified health plans and regulators overseeing state marketplaces would receive regular updates on suspended and terminated agents and brokers.
Wyden’s statement noted that the bill has strong support from national groups, including the American Cancer Society and the National Health Council, as well as heart disease organization WomenHeart.
However, the National Association of Benefits and Insurance Professionals (NABIP) expressed concerns about the proposal.
NABIP supports strengthening consumer protections but argued that the bill unfairly paints the entire profession in a negative light. The group attributed fraudulent activities to technical vulnerabilities in the federal marketplace.
“To date, we have not received any updates regarding law enforcement action against this sophisticated criminal activity, which harmed both healthcare consumers and the agents who enrolled them,” NABIP chief executive officer Jessica Brooks-Wood said.
She said that the bill should focus on targeting fraudsters while allowing good-faith agents and brokers to operate without interference.
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