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The National Association of Benefits and Insurance Professionals (NABIP) has filed a federal lawsuit against the US Department of Health and Human Services (HHS), challenging restrictions on insurance agents and brokers participating in Affordable Care Act (ACA) marketplaces ahead of the 2027 open enrollment period.
The complaint, filed in the US District Court for the District of Maryland, accuses HHS of violating the Administrative Procedure Act by imposing a moratorium on new broker registrations without the customary public comment process.
- The National Association of Benefits and Insurance Professionals (NABIP) has filed a federal lawsuit challenging HHS restrictions on broker participation in ACA marketplaces.
- Nearly 19,000 agents and brokers could be prevented from registering for the 2027 enrollment period, according to CMS estimates cited by NABIP.
- CMS says its crackdown on unauthorized enrollments will save $2.2 bn in federal subsidies, while NABIP argues the restrictions unfairly affect legitimate insurance professionals.
NABIP argues that the agency exceeded its statutory authority and is seeking a court injunction to block the registration freeze. The association also wants the Centers for Medicare & Medicaid Services (CMS) to establish an alternative approach that allows compliant agents and brokers to continue operating on federal health insurance exchanges.
According to NABIP, the restrictions could prevent nearly 19,000 insurance agents and brokers from registering and conducting business through ACA marketplaces. The association said the estimate comes from CMS itself.
The dispute comes ahead of the 2027 ACA open enrollment period, scheduled to begin in November 2026, when consumers can purchase new health insurance policies or renew existing coverage.
NABIP challenges legality of ACA broker registration restrictions
NABIP maintains that CMS cannot impose a broad registration moratorium without following the administrative procedures required for federal rulemaking.
In its lawsuit, the association is asking the court to “compel the Centers for Medicare & Medicaid Services (CMS) to conduct the new agent and broker training and registration that is necessary for those agents and brokers to participate in the federal marketplace during Open Enrollment and beyond.”
The trade association does not dispute the existence of fraudulent enrollment activity. Its objection concerns the scope and legality of CMS’s response, which it argues restricts legitimate insurance professionals rather than targeting misconduct directly.
NABIP believes federal regulators could introduce more narrowly focused safeguards to identify fraudulent brokers and prevent unauthorized enrollment activity without excluding thousands of otherwise eligible professionals.
CMS crackdown on unauthorized ACA enrollments targets subsidy fraud
The lawsuit follows enforcement measures announced by CMS in September, when the agency moved to remove certain brokers from ACA marketplaces and cancel approximately 315,000 health insurance enrollments it classified as unauthorized.
CMS said the actions were intended to address fraudulent activity involving agents and brokers who enrolled consumers in insurance plans without their knowledge or consent.
The agency also identified cases involving incomplete enrollment documentation, including missing personal information as significant as Social Security numbers.
According to CMS, canceling the unauthorized enrollments will save the federal government approximately $2.2 bn in subsidies that would otherwise have been paid to offset health insurance premiums.
Many of the brokers associated with the disputed enrollments had only recently entered the federal marketplace, beginning their participation in 2026.
CMS’s enforcement measures therefore extend beyond removing specific brokers and canceling questionable enrollments to restricting the registration of new agents ahead of the next coverage year.
Insurance brokers call for targeted fraud prevention measures
NABIP President Mychal Walker said the association supports stronger safeguards against fraudulent ACA enrollments but considers the registration freeze an excessive response.
NABIP supports strong action against fraud, and we have been telling CMS for years that the federal Marketplace needs stronger safeguards. But banning thousands of agents and brokers who have done nothing wrong is not targeted fraud prevention. It is an overbroad response that harms legitimate professionals and the consumers they serve.
Mychal Walker, NABIP President
“CMS should be going after bad actors, not shutting out thousands of licensed agents and brokers because of a handful of bad agents and brokers,” Walker said in a statement.
The association’s legal challenge centers on whether CMS can restrict access to ACA marketplaces on such a broad basis while pursuing its stated objective of reducing fraudulent enrollment activity.
NABIP is seeking judicial intervention before the upcoming enrollment period to restore training and registration opportunities for eligible brokers, while leaving CMS able to pursue enforcement measures against agents responsible for unauthorized enrollments.
