Bill Targets Unauthorized Health Plan Switching

Published by ProtectHealth

Las Vegas, NV - October 10, 2024

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Trivia Question: What’s the sneaky reason why your health insurance policy might be harder to read than a best-selling mystery novel? 

Answer at the bottom of the newsletter

 Interesting Facts

1. Severe Penalties for Fraudulent Practices: The Insurance Fraud Accountability Act introduces stringent penalties for health insurance agents and brokers who engage in fraudulent activities. These penalties include civil fines ranging from $10,000 to $50,000 per applicant for negligence or rule violations, and up to $200,000 for knowingly providing false information. Additionally, criminal penalties can include imprisonment for up to 10 years for those who willfully provide false or fraudulent information related to ACA plan enrollments

2. High Volume of Consumer Complaints: In the first half of 2024, the Centers for Medicare and Medicaid Services (CMS) received nearly 74,000 complaints from consumers alleging their health insurance plans were changed without their consent, and over 134,000 complaints about being enrolled in plans without their consent. CMS has resolved the majority of these cases and has suspended 200 agents and brokers suspected of unauthorized activities

3. New Enrollment Verification Steps: To prevent unauthorized plan switching, CMS has implemented new rules requiring agents and brokers who are not already associated with a consumer's enrollment to take additional steps before making changes. These steps include conducting a three-way call with the consumer and a Marketplace representative or allowing the consumer to make changes themselves through HealthCare.gov. This measure aims to ensure that consumers are fully aware and consenting to any changes made to their health insurance plans

Q&A

Q: What is the Insurance Fraud Accountability Act?
A: The Insurance Fraud Accountability Act is legislation introduced by U.S. Senators to protect consumers from fraudulent health insurance practices. It targets agents and brokers who enroll or switch consumers into Affordable Care Act (ACA) plans without their consent, imposing fines up to $200,000 and potential criminal penalties for offenders

.Q: How does this legislation affect Nevada consumers?
A: Nevada operates its own health insurance exchange, Nevada Health Link, which has already implemented measures to prevent unauthorized plan changes. Since 2020, agents and brokers in Nevada must confirm any changes via a recorded call with the consumer present. This ensures that unauthorized switching of plans is nearly impossible in Nevada

.Q: What protections are in place for consumers in states using HealthCare.gov?
A: For states using HealthCare.gov, the Centers for Medicare and Medicaid Services (CMS) issued new rules prohibiting unauthorized plan changes. Agents must have previously enrolled the consumer to make changes or conduct a three-way call with the consumer and a Marketplace representative

.Q: Why was this legislation introduced?
A: The legislation was introduced in response to over 200,000 complaints received by CMS about unauthorized plan enrollments or switches. These fraudulent activities can lead to consumers losing access to preferred healthcare providers, facing unexpected costs, or incurring tax liabilities.

Answer: It’s called Manufactured Complexity! Insurance companies often make policies confusing on purpose, so you’ll need an expert to explain it. But don't worry, with the right partner, like ProtectHealth, we keep things simple, clear, and hassle-free!