Trump administration sued for second time over ACA broker freeze

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Dive Brief:

• The Trump administration is being sued by another trade association upset with its decision to lock out new Affordable Care Act agents and brokers from 2027 open enrollment.
• Health Agents for America, which represents more than 1,000 independent agents in the U.S., filed a lawsuit Wednesday in Maryland district court arguing that the CMS didn’t consider the harm on brokers and consumers in promulgating the moratorium, and that it exceeds the agency’s statutory authority.
• The complaint asks the court to stop the freeze from going into effect before open enrollment begins, which is Nov. 1 in most states.

Dive Insight:

In September, the HHS and CMS released an interim final rule preventing agents and brokers without a previous registration in the exchanges from signing up to help consumers in this year’s open enrollment period. The moratorium is scheduled to last until February, which — given open enrollment ends the month before — effectively prevents new agents and brokers from helping consumers sign up for plans for 2027.

Regulators said their goal is stopping fraud, pointing to data showing that most improper enrollments — like signing consumers up for plans or switching them from one plan to another without their approval — are tied to new agents and brokers in the exchanges. The pause will give the CMS time to roll out heightened guardrails, such as enhanced identity verification and monitoring.

The policy was effective immediately, without an opportunity for the public to weigh in. The Trump administration said the quick turnaround was necessary to prevent new agents and brokers from rushing to register before an effective date.

But it’s also a violation of the Administrative Procedure Act, according to the new lawsuit from Health Agents for America.

The complaint says that the freeze will cause significant financial harm to brokers, given many have invested heavily in recruiting and training new workers to help with ACA enrollments for 2027. If those workers can’t participate, they’ll have to be laid off, and broker agencies will have to eat those costs, the complaint alleges.

Moreover, agent and broker groups will have less capacity to help consumers, which will make it harder for people choosing between ACA plans to understand their options and navigate enrollment, according to Health Agents for America.

It’s the latest insurance group to cry foul over the policy. The National Association of Benefits and Insurance Professionals filed a lawsuit with the same court earlier this month also seeking an injunction to stop the moratorium.

And the National Association of Insurance Commissioners, a group representing state regulators, wrote a letter to the director of the CMS’ Center for Consumer Information and Insurance Oversight raising concerns that staffing shortages as a result of the freeze would make it difficult for consumers to find coverage.