Federal enforcement against unauthorized Affordable Care Act enrollments is arriving during a broader contraction in the individual insurance market. Higher Marketplace costs are already pushing some Americans toward employer-sponsored coverage, adding another issue for benefits teams preparing for 2027.
The Centers for Medicare & Medicaid Services canceled about 315,000 Marketplace enrollments covering more than 760,000 people on August 31.
CMS said reviews conducted with health insurers determined the enrollments were unauthorized, and the cancellations should return roughly $2.2 bn in advance premium tax credit payments.
CMS has also temporarily stopped certain agents and brokers from registering for the federally facilitated Marketplace. The restriction applies to professionals without an active Plan Year 2026 Exchange Agreement who seek registration for 2027.
The moratorium took effect September 22 and currently runs through February 1, 2027. CMS retains authority to end it earlier, extend it or modify its terms. Under the present schedule, affected brokers would remain outside the federal Marketplace throughout the 2027 open enrollment period.
Those enforcement measures are separate from the affordability changes already reducing ACA Marketplace enrollment. Enhanced premium tax credits expired at the end of 2025, increasing what many households pay for individual coverage.
February effectuated Marketplace enrollment stood at 19.2 mn people in 2026, according to federal data analyzed by KFF. That compares with 21.8 mn in 2025, representing a 12% year-over-year decline after several years of enrollment growth.
According to Beinsure, US employer healthcare costs will rise 9.5% in 2027, taking average annual spending above $19,000 per employee. The forecast extends a run of healthcare cost increases approaching double digits.
The shift matters for employers because some former Marketplace members are expected to return to workplace coverage. Urban Institute modeling estimated 3.2 mn more people would select employer-sponsored insurance in 2026 under standard premium tax credits than under an extension of the enhanced credits. That represents an increase of roughly 2% in employer-sponsored enrollment under the model.
Access to workplace health plans remains uneven, especially among lower-wage employers and retail businesses. Among employees at firms offering health benefits, 80% were eligible for their employer’s plan in 2025, according to KFF.
Eligibility dropped to 67% among firms with relatively large shares of lower-wage employees. Retail recorded an even lower 53% eligibility rate, leaving many workers more dependent on coverage outside their employer.
Part-time employees face another gap. Only 27% of employers with at least 200 workers that offered health benefits also offered coverage to part-time staff in 2025, roughly unchanged from the previous year.
ACA employer shared-responsibility rules generally classify an employee as full time when the person averages at least 30 service hours weekly, or 130 hours monthly. Applicable large employers face potential penalties if they fail to offer qualifying coverage to enough full-time employees (see A Californian’s Guide to Open Health Insurance Enrollment).
The federal rule doesn’t require those employers to extend health benefits to part-time employees. Employers remain free to offer coverage more broadly, making wider eligibility largely a benefits decision rather than a new federal obligation.
Those distinctions matter as higher Marketplace premiums change employee demand. Companies whose workers previously relied on subsidized individual coverage face renewed questions about eligibility rules and employee contributions.
Plan design also enters the discussion as employees compare workplace coverage with more expensive individual options. Employers with substantial part-time or lower-wage workforces face the greatest exposure to this shift because their existing eligibility rates are already below national averages.
Marketplace distribution is changing at the same time. CMS said agents and brokers who registered for the first time in 2026 represented a small share of broker-assisted enrollments but accounted for a disproportionate share of activity the agency classified as higher risk.
CMS also sent termination notices to more than 200 noncompliant agents and brokers since January. During the summer, the agency issued 569 notices of intent to terminate Exchange Agreements involving agents whose applications lacked identifying information such as Social Security numbers.
The temporary registration freeze therefore applies only to agents and brokers without Plan Year 2026 Exchange Agreements. Existing registered professionals aren’t covered by the new-entry moratorium, and the restriction doesn’t apply to registration on state-based exchanges (see The Top Agencies and Resources to Find Affordable Health Insurance in California).
The distribution effect still reaches a large portion of federal Marketplace enrollment. Agents and brokers assisted 76% of the 10.8 mn active HealthCare.gov plan selections during the 2026 open enrollment period, according to CMS.
Benefits industry groups support stronger enforcement against unauthorized enrollments but have challenged the breadth of the moratorium. The National Association of Benefits and Insurance Professionals has argued for enforcement aimed directly at brokers responsible for fraudulent activity.
NABIP President Mychal Walker said a blanket restriction would penalize legitimate professionals rather than concentrate enforcement on bad actors. The association has urged CMS to use more targeted safeguards while preserving consumer access to licensed agents and brokers.
For employers, these Marketplace changes arrive through two separate channels. Higher individual-market costs are moving some workers toward employer-sponsored plans, while tighter broker access changes how consumers obtain federal Marketplace coverage.
Employers aren’t automatically required to expand eligibility because Marketplace enrollment falls. Still, companies with restrictive eligibility rules face stronger reasons to review employee demand, contribution structures and the affordability of their existing group plans as 2027 approaches.
