The National Association of Benefits and Insurance Professionals has filed a lawsuit against the Trump administration, alleging that the Department of Health and Human Services (HHS) violated the law by implementing a controversial policy without public comment.
The policy in question bars thousands of agents and brokers from participating in the 2027 Affordable Care Act (ACA) enrollment season. According to the lawsuit, the HHS failed to follow the Administrative Procedure Act, which requires public input on new policies.
Policy Freeze and Legal Challenge
The HHS and Centers for Medicare & Medicaid Services (CMS) announced last month that agents and brokers who didn’t help people sign up for ACA plans in 2026 would be forbidden from registering to do so for 2027. This immediate moratorium, effective until February 1, locks out new agents and brokers from the entire enrollment period, which runs from November 1 to January 15 in most states.
The CMS estimates that nearly 19,000 agents and brokers will be prevented from registering. While the agency cites fraud prevention as the reason, the NABIP argues that the policy is overly broad and penalizes legitimate professionals.
Impact on Agents and Consumers
The NABIP, representing over 100,000 licensed agents, brokers, and benefits professionals, claims the rule will harm small businesses and independent agents. Many have invested in recruiting and training new agents, expecting them to work during the upcoming enrollment season.
Mychal Walker, NABIP President, stated, “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.”
The lawsuit, filed in Maryland district court, seeks to vacate the rule and compel the CMS to conduct training and registration for new agents and brokers so they can participate in the 2027 enrollment period.
Legal Arguments and Evidence
The lawsuit claims the CMS’s evidence linking new brokers to improper enrollments is shaky and unfairly penalizes all new marketers. It highlights that the overwhelming majority of all agents and brokers, both new and returning, have no track record of improper sign-ups.
Fraud Concerns and Regulatory Approach
While fraud is a legitimate concern in the ACA exchanges, the CMS’s approach has been criticized for being too blunt. For instance, the agency recently terminated ACA coverage for over 760,000 people, citing unauthorized enrollment. However, some of these individuals were not fraudulently enrolled, and the CMS had to reinstate their coverage, according to KFF Health News.
