Insurance Fraud Accountability Act

Bill Number: H.R. 2079
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Health
Status: Introduced
Latest Action: 2025-03-11: Referred to the House Committee on Energy and Commerce.
Last Updated: 2026-01-15T09:06:36Z

AI-Generated Summary

Purpose of the Legislation

The Insurance Fraud Accountability Act (H.R. 2079) aims to reduce fraudulent enrollments in health insurance plans offered through the Affordable Care Act (ACA) marketplaces. It does this by increasing penalties for misconduct by insurance agents and brokers, strengthening consumer protections, regulating marketing organizations involved in enrollments, and improving oversight and transparency to prevent unauthorized or deceptive practices.

Key Provisions

Penalties for Agents and Brokers:
Civil penalties for negligent or careless failures to provide accurate enrollment information: $10,000 to $50,000 per affected individual.
Civil penalties for knowingly providing false or fraudulent information: Up to $200,000 per affected individual, with procedures similar to those under the Social Security Act for imposing and appealing fines.
Criminal penalties for knowingly and willfully providing false information: Fines under federal law and up to 10 years in prison.

Consumer Protections in Enrollments:
For federally run ACA marketplaces (Exchanges), a verification process for new enrollments or coverage changes submitted by agents or brokers, starting no later than January 1, 2029.
Requirements include: Proof of consumer consent (e.g., a standard form), delaying commission payments to agents/brokers until enrollment issues are resolved, timely notifications to consumers about changes (with instructions on canceling unauthorized actions), access to account details via websites or hotlines, and reporting of any involved marketing organizations.
Emphasis on maintaining coverage continuity, preventing disenrollment without consumer consent even if violations occur.

Regulation of Marketing Organizations:
Defines and regulates "field marketing organizations" (entities that employ or contract with agents/brokers for enrollment activities) and "third-party marketing organizations" (entities paid for lead generation, marketing, or sales related to enrollments).
Establishes criteria for states to allow these organizations to participate in the "chain of enrollment" (steps from marketing to final enrollment decision), including acting in consumers' best interests, reporting terminations of agents/brokers, meeting federal/state marketing standards, submitting materials for review, obtaining licenses/registration, and prohibiting improper compensation for referrals.
Requires issuers (insurance companies) to report terminations.

Transparency and Oversight:
Mandates periodic audits of agents and brokers based on consumer complaints, patterns of potential fraud, or other risk factors, coordinated with states and insurance commissioners.
Requires sharing audit results and fraud referrals with state insurance departments.
Provides Exchanges, health plans, and states with a regular list of suspended or terminated agents and brokers.

Significant Changes to Existing Law

Amends Section 1411(h) of the ACA to explicitly target agents and brokers with new civil and criminal penalties for fraud or negligence in providing enrollment information, expanding beyond general penalties for any person.
Adds a new subsection to Section 1311(c) for the enrollment verification process in federally facilitated Exchanges, including consumer access and notification rules not previously specified.
Expands Section 1312(e) to include regulation of field and third-party marketing organizations, defining key terms (e.g., "marketing materials" as items influencing enrollment decisions) and setting minimum criteria for participation, which were not previously addressed.
Introduces new audit processes and a public list of problematic agents/brokers under Section 1312(e), enhancing federal enforcement without limiting existing state or federal actions.

Potential Impacts

On Government Agencies: The Department of Health and Human Services (HHS) and the Secretary of HHS will face increased responsibilities for developing verification processes, conducting audits, reviewing marketing materials, maintaining databases/lists, and coordinating with states. This could require additional resources for enforcement but may reduce long-term fraud-related costs in ACA programs.
On Citizens: Consumers enrolling in ACA health plans will benefit from stronger safeguards against unauthorized changes, easier access to account information, and quicker resolution of fraud, potentially leading to fewer coverage disruptions and financial losses. However, it may slightly delay commission payments, indirectly affecting how agents assist with enrollments.
On International Relations: No direct impacts, as the bill focuses on domestic health insurance regulations.

Main Stakeholders Affected

Consumers/Enrollees: Primary beneficiaries through enhanced protections against fraud and unauthorized enrollments.
Agents and Brokers: Directly regulated with new penalties, verification requirements, and standards of conduct; must register and report more extensively.
Field and Third-Party Marketing Organizations: Newly subject to criteria for participation, reporting obligations, and marketing restrictions.
Health Insurance Issuers and Qualified Health Plans: Required to report terminations, access verification data for commissions, and receive lists of problematic agents; may see reduced fraud in enrollments.
ACA Exchanges (Federal and State): Federal Exchanges must implement verification and notifications; states gain tools for oversight but must align with new criteria.
HHS and State Insurance Departments: Lead enforcement, audits, and coordination, with increased workload.

Notable Legal, Constitutional, or Political Implications

Legal Implications: Strengthens anti-fraud enforcement in ACA marketplaces by aligning penalties with broader federal laws (e.g., Social Security Act procedures), potentially increasing civil and criminal cases against bad actors. It preserves existing enforcement pathways while adding specificity, which could streamline prosecutions but requires HHS to issue regulations by 2029.
Constitutional Implications: No major concerns; the bill operates within Congress's authority to regulate interstate commerce and health policy under the ACA framework, without infringing on free speech (marketing rules target deception) or due process (appeal procedures are provided).
Political Implications: Builds public trust in the ACA by addressing fraud vulnerabilities, which have been points of criticism. As a targeted amendment, it could garner bipartisan support by focusing on accountability without broader ACA overhauls, though implementation timelines allow for administrative adjustments across administrations.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Ross, Deborah K. [D-NC-2]

Cosponsors (5)

Rep. Castor, Kathy [D-FL-14], Rep. Foushee, Valerie P. [D-NC-4], Rep. Dingell, Debbie [D-MI-6], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Cohen, Steve [D-TN-9]