Insurance lobby sues HHS over decision to bar brokers from ACA open enrollment
A major health insurance broker lobby is suing the U.S. Department of Health and Human Services (HHS), challenging the agency’s decision to kick hundreds of agents and salesmen off Affordable Care Act (ACA) marketplaces, while banning new enrollees from signing up next year.
The move has drawn the ire of the National Association of Benefits and Insurance Professionals (NABIP), which filed a complaint in a U.S. District Court of Maryland on Thursday, accusing HHS of violating the Administrative Procedure Act.
Per the court filing, the lobby believes HHS overstepped its authority by making the call to put a moratorium on new brokers signing up for the exchange, adding that the agency also failed to subject the rule to a customary public comment period.
NABIP is asking the court to intervene by issuing an injunction against the freeze. It’s also asking that the Centers for Medicare & Medicaid Services (CMS), instead, develop a solution that allows law-abiding agents and brokers to operate on the exchanges.
To that end, NABIP said in a statement that its lawsuit asks a judge to “compel the Centers for Medicare & Medicaid Services (CMS) to conduct the new agent and broker training and registration that is necessary for those agents and brokers to participate in the federal marketplace during Open Enrollment and beyond.”
The 2027 open enrollment period for patients to sign up for new insurance through the marketplace, or to renew their existing plans, begins next month.
According to NABIP, nearly 19,000 agents and brokers will now be prevented from registering and doing business on ACA markets—it said that number comes from CMS’ own estimates.
Indisputable acts of fraud
In announcing the decision last month to expel certain brokers and cancel 315,000 health plan enrollments, CMS said its action was motivated by reducing fraudulent activity on the marketplaces.
The agency accused unscrupulous brokers of signing up patients for medical insurance without their knowledge, in many cases failing to file complete paperwork, with absent details sometimes being something as critical as a Social Security number.
In canceling the "unauthorized" enrollments, CMS said the federal government will save $2.2 billion meant to be paid out as legitimate subsidies to offset the cost of health insurance premiums.
Many of the offending brokers were new to the federal marketplace, only participating in the ACA since 2026.
NABIP said that the “existence of fraud” on ACA markets is “not in dispute.” Instead, the group questions the legality of the solution, especially when it believes other measures could be taken to target scammers and low-quality brokers directly.
“NABIP supports strong action against fraud, and we have been telling CMS for years that the federal Marketplace needs stronger safeguards. But banning thousands of agents and brokers who have done nothing wrong—many of whom have long and distinguished records helping consumers—is not targeted fraud prevention. It is an overbroad response that harms legitimate professionals and the consumers they serve,” NABIP President Mychal Walker said in a statement. “CMS should be going after bad actors, not shutting out thousands of licensed agents and brokers because of a handful of bad agents and brokers.”
“There is a better approach: target fraud where it occurs, strengthen the system’s security, and hold bad actors accountable while preserving consumers’ access to trusted professionals,” he added.
A court has yet to weigh in on NABIP’s lawsuit.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.