How Agents Can Protect Clients from Unauthorized ACA Plan Switching

Recently, some marketplace clients have found their coverage changed without their consent. Additionally, some under-65 health agents have noticed missing commissions.

While not the case for most beneficiaries or agents, it’s important to be aware of this situation and know what to do if your client’s Affordable Care Act (ACA) policy was switched without consent.

As their trusted agent, you are your client’s best advocate. There are ways for you to protect your clients, and well-earned commissions, from being targeted by other agents or call centers who may want to take advantage of them.

What Is an Unauthorized Plan Switch?

“Bad apple” agents are making illegal policy switches for ACA clients who receive their under-65 health coverage from the federal marketplace, aka The rogue agents or marketing call centers making these switches often change an individual’s plan without the knowledge of their current agent and without informing the client of their new coverages. We assume that rogue agents and marketplace call centers deceive clients to collect the commissions.

Who Is Being Affected?

CMS has found that these unauthorized ACA plan switches are mainly affecting low-income consumers that enroll through the Federally Facilitated Marketplace (FFM). These clients qualify for $0-premium plans, which means they don’t receive a monthly premium bill that might change — making it harder to realize the switch. These clients also qualify for a rolling Special Enrollment Period (SEP), allowing them to enroll in coverage at any point of the year.

Unauthorized ACA plan switches are mainly affecting low-income consumers that enroll through the Federally Facilitated Marketplace (FFM).

Although these switches are not commonplace, the Centers for Medicare and Medicaid Services (CMS) is trying to address them quickly.

CMS’ Response

CMS is aware of this fraud in the marketplace and wants to protect vulnerable consumers from being taken advantage of. They’ve enacted several changes to help protect clients from unplanned switches.

In the marketplace final rule for 2024, CMS required agents to collect written consent and authorization before enrolling clients or changing their coverage. CMS also now masks the first six digits of Social Security numbers on and enhanced direct enrollment sites. As an agent, you must follow the requirements outlined by CMS and file the required documents. Staying compliant as an agent is the best way to protect you and your clients.

CMS is monitoring accounts more closely for signs of fraud. Agents and consumers should report unauthorized activity upon noticing it.

How to Protect Your ACA Clients

Rogue agents don’t need SSNs to change coverage; they’re able to switch client coverage by entering a client’s name, date of birth, and resident state. Policyholders affected by the change in coverage don’t notice their plan has changed until they find out their doctor is no longer in network or their medication is no longer covered as it was before. Some clients aren’t finding out that their plan has changed until they’re paying a higher deductible. Clients may also have to pay back taxes if their income is misrepresented on their marketplace account.

You are your client’s best advocate. To protect your clients from fraud, you can:

  • Thoroughly educate them on their plan — its name, costs, network, and formulary
  • Provide them with the resources to be able to find plan information on their own when needed
  • Educate them about the current marketplace climate in case they hear something on the news or social media that’s concerning to them or misleading
  • Assure them that you will not make changes without their written permission
  • Ask them to contact you if they have questions or concerns about their coverage or notice fraudulent activity

Be a trustworthy agent who acts in their best interest and be transparent. Tell them that marketing agencies have created online or social media ads that are vague and promise free subsidies or $0 health insurance. Let them know these are actually the premium tax credits they’re eligible for because of their income. Knowing these vital pieces of information or having the tools to access them is one of the best ways for your clients to combat fraud.

Tell them that marketing agencies have created misleading online ads that are vague and promise free subsidies or $0 health insurance.

There’s a lawsuit to prevent widespread fraud from occurring. Several individuals who were affected by an unauthorized plan change filed a lawsuit against a call center agency that changed their coverage after promising money in social media ads.

How to Report an Unauthorized Plan Change

If you find that a client’s plan has been changed, check that your client is aware. If they did not intend to make a change, report it to federal and state regulators. Guide your client through the process of changing their coverage to what they had before, if they’d like that coverage back.

Notify the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to report unauthorized activity on accounts of clients in the federal marketplace. You can also report fraud to other reporting agencies. Health Agents for America (HAFA) is a trade organization for insurance agents that is focused on the marketplace. They feature a Fraud Reporting tab on their website with instructions for agents on how to report fraud to the federal marketplace, state marketplace, direct enrollment platform, carriers, or the U.S. Department of Health and Human Services.

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Even though there are scams and call center agencies manipulating some clients into changing their health coverage, you are your clients’ best advocate. Take the time to educate your clients about these false advertisements and their plan details. This is the best way to prevent losing your hard-earned commissions!

Our Under-65 Sales team is aware that these scams are out there and is prepared to help agents make the proper reports if you and your clients have been affected. Become a Ritter agent if you want a team of experts on your side to help guide you through compliance standards and tricky situations.

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