The Insurance Fraud Accountability Act aims to combat fraudulent enrollment in qualified health plans by increasing penalties for fraudulent agents and brokers, enhancing consumer protections, regulating marketing organizations, and increasing transparency through audits and information sharing.
Ron Wyden
Senator
OR
The Insurance Fraud Accountability Act aims to combat fraudulent enrollment in qualified health plans by increasing penalties for agents and brokers who provide false information, enhancing consumer protections through verification processes and access to account information, and regulating field marketing organizations. It also increases transparency through mandatory audits and the creation of a list of suspended or terminated agents and brokers.
Insurance Fraud Act Targets Agents with Stiff Penalties, Adds New Consumer Verification Rules
The Insurance Fraud Accountability Act aims to tackle shady enrollment practices in qualified health plans, primarily by putting insurance agents and brokers under a much tighter microscope. This legislation introduces significant financial and even criminal penalties for providing false or fraudulent information during enrollment, alongside new rules designed to give consumers more control and transparency over their health coverage.
Cracking Down on Bad Actors
This bill doesn't pull punches when it comes to agent accountability. Providing incorrect information negligently could cost an agent or broker between $10,000 and $50,000 per affected individual. Knowingly providing false or fraudulent information carries even steeper civil penalties, up to $200,000 per person. Beyond fines, the act establishes criminal penalties, including potential imprisonment for up to 10 years for willful fraud (SEC. 2). The goal is clear: deter agents and brokers from cutting corners or deliberately misleading consumers to make a sale.
Putting Consumers Back in Control
Several new safeguards are included to protect individuals. Before an enrollment submitted by an agent or broker is finalized, a verification process kicks in, requiring documented proof that the individual actually consented to the plan (SEC. 2). Commissions won't be paid out until any enrollment discrepancies are sorted. You'll also get notified if changes are made to your coverage by an agent and receive clear instructions on how to cancel unauthorized activity. Furthermore, the bill mandates access to your account information, either online or via a hotline, showing who enrolled you, the plan details, and any changes made (SEC. 2). This means fewer surprise enrollments or plan switches.
Shining a Light on the Middlemen
The legislation also brings Field Marketing Organizations (FMOs) and Third-Party Marketing Organizations (TPMOs) – companies often involved in the enrollment chain – under regulation. States can allow them to operate, but they'll have responsibilities like reporting agent terminations and adhering to marketing standards (SEC. 2). Transparency gets another boost through mandated audits of agents and brokers, triggered by complaints or suspicious patterns. The findings from these audits will be shared, and a list of suspended or terminated agents will be created and distributed to insurers, Exchanges, and States to help prevent repeat offenders (SEC. 2).