The Insurance Fraud Accountability Act aims to combat fraud in health plan enrollments by increasing penalties for fraudulent agents and brokers, enhancing consumer protections, regulating marketing organizations, promoting transparency through audits, and creating a list of suspended or terminated agents and brokers.
Deborah Ross
Representative
NC-2
The Insurance Fraud Accountability Act aims to combat fraud in health insurance enrollment by increasing penalties for fraudulent agents and brokers, enhancing consumer protections through verification processes and notifications, regulating marketing organizations, and promoting transparency through audits. It also establishes a list of suspended and terminated agents and brokers to prevent further fraudulent activity. These measures are intended to ensure accurate enrollment, protect consumers from unauthorized changes, and maintain the integrity of qualified health plans.
Health Insurance Enrollment Overhaul: Bill Targets Fraud with $200K+ Penalties, New Agent Rules, and Consumer Safeguards
The Insurance Fraud Accountability Act aims to tackle shady sign-ups in qualified health plans – the insurance options often available through government marketplaces. This bill puts new rules and much sharper teeth into enforcement, primarily targeting insurance agents and brokers involved in the enrollment process. Key measures include significantly higher financial penalties, stricter verification steps, and increased government oversight.
Steeper Stakes for Agents and Brokers
The bill dramatically increases penalties for agents and brokers who submit incorrect information. Providing wrong details due to negligence could result in civil fines ranging from $10,000 to $50,000 per affected individual. If an agent knowingly provides false or fraudulent information, the civil penalty jumps to $200,000 per individual. Beyond fines, knowingly committing fraud could lead to criminal charges, including additional fines and imprisonment for up to 10 years. This ramps up the pressure on agents and brokers to ensure accuracy and legitimacy in every application they handle.
Bolstering Consumer Control and Awareness
Several new requirements focus on protecting consumers from unauthorized enrollments. Agents or brokers submitting new applications or changing coverage must now follow a verification process, including documenting that the individual actually consented. Commissions won't be paid until any enrollment inconsistencies are cleared up. Importantly, individuals must be notified about any enrollment changes made on their behalf and given clear instructions on how to cancel if the activity wasn't authorized. The bill also mandates access for individuals to their account information, including details on the agent involved and any plan changes, likely through a website or hotline. This aims to give people more direct oversight over their own health coverage.
Regulating the Marketing Maze and Increasing Oversight
The act extends regulation to Field Marketing Organizations (FMOs) and Third-Party Marketing Organizations (TPMOs) – groups often involved in outreach and enrollment assistance. States allowing these organizations must ensure they meet specific criteria, including acting in the enrollee's best interest and adhering to marketing standards set by the government. These organizations will need to register and potentially submit marketing materials for review. Furthermore, the bill establishes a system for government oversight through periodic audits of agents and brokers, triggered by complaints, suspicious enrollment patterns, or other factors. Audit results will be shared, and potential fraud cases referred to state insurance departments. A federal list of suspended and terminated agents and brokers will also be created and shared with insurers and state regulators to prevent bad actors from simply moving elsewhere.