2025 was an important year for Medicare Advantage (MA) plans that pay state-licensed agents and brokers to market their plans and engage in lead generation, subject to complex federal regulations. As we previously discussed on Health Law Scan, improper broker arrangements were identified as a 2025 focus area by the whistleblower bar and the US Department of Justice (DOJ), particularly the US Attorney’s Office for the District of Massachusetts.
Major highlights from 2025 include the following:
- DOJ filed a complaint against the three largest MA plans and the three largest insurance broker organizations for alleged kickbacks and discrimination; a hearing on a joint motion to dismiss was held on January 21, 2026
- A district court found that the Centers for Medicare and Medicaid Services (CMS) lacks “ratemaking authority” and invalidated regulations setting agent/broker compensation price caps
- CMS proposed a rule that would remove several Biden-era regulations that enhanced scrutiny over MA marketing. The comment period ended on January 26, 2026.
This blog post provides an introduction to agent/broker arrangements and describes recent enforcement trends, court cases, and agency guidance to help MA plans and other stakeholders navigate potential pitfalls and ensure compliance with federal law.
What Is the Role of an Agent/Broker?
Each year, agents and brokers help millions of individuals enroll in an insurance plan. Insurance agents and brokers are licensed under state law to provide consumers with information related to insurance plan options in their local area, including costs, coverage, and financial assistance. Agents/brokers are subject to rigorous oversight, including annual training and examinations. States set standards and licensing requirements applicable to agents/brokers, but in general
- a captive agent represents a single insurance company;
- an independent agent represents multiple insurance companies; and
- a broker represents the individuals seeking insurance coverage and has a duty to act in the individual’s best interest.
MA plans are permitted to employ and contract with captive or independent agents and brokers to sell their insurance plans provided the plans comply with the federal regulatory requirements. Many individuals with Medicare rely on agents/brokers for assistance with navigating the complex Medicare choices as they comparison shop for coverage options.
Are There Marketing Rules?
Yes. In recent years, particularly since the end of the pandemic and as the number of MA plans on the market increased, there has been an increase in plan marketing activities and the use of insurance agents and brokers. The increased activities also resulted in increased beneficiary complaints related to aggressive sales tactics and, in turn, regulatory changes to establish guardrails on communications and marketing activities by agents and brokers contracting with MA plans.
Note that the distinction between marketing and communications can be subtle and affects which federal requirements apply to the activities:
- Communications: Any activities and use of materials created/administered by the MA plan (or its downstream entities) to provide information to current and prospective enrollees
- Example: Plan enrollees can get their flu shot for $0 copay at a network pharmacy
- Marketing: Communications that include or address plan benefits, premiums, cost sharing, rankings, or rewards/incentives that are intended to draw beneficiary attention to or influence beneficiary decision-making to select or stay enrolled in a plan
- Example: Plan offers $0 premium plans in nowhere county
CMS’s regulations governing Medicare Advantage and Part D plan marketing are at 42 CFR §§ 417, 422, and 423. Additionally, CMS published the Medicare Communications and Marketing Guidelines (MCMGs), which seek to aid plans in understanding and complying with the regulations. The regulations broadly define third-party marketing organizations (TPMOs) to mean organizations and individuals, including independent agents and brokers, who are compensated to perform lead generation, marketing, sales, and enrollment-related functions as a part of the chain of enrollment. 42 CFR §§ 422.2260, 423.2260. The chain of enrollment describes the steps taken by a beneficiary from becoming aware of an MA plan(s) to making an enrollment decision. As such, numerous stakeholders are subject to the marketing regulations.
Under the Biden administration, CMS promulgated a sweeping rule imposing dozens of new requirements related to marketing and enrollment activities (e.g., requiring captive agents to tell prospective enrollees how many plans are available from their MA plan and expanding MA plans’ role in monitoring agent/broker activities). In 2024, CMS prohibited certain “predatory” marketing and limited the distribution of personal beneficiary data by TPMOs. Importantly, both rules also proposed new standards for agent and broker compensation to prevent anti-competitive and anti-consumer patient steering incentives. Specifically, CMS set a national agent/broker fixed compensation amount for initial enrollments into a Medicare Advantage or Part D plan.
On November 28, 2025, CMS proposed a rule (CMS-4212-P) that would relax several of the 2023 and 2024 marketing oversight measures, such as removing time and manner restrictions on marketing by MA plan agents/brokers at educational events, reducing retention of call recordings from 10 to six years, and removing the annual mid-year notice for unused supplemental benefits. This proposed rule may suggest a shift in CMS’s approach to MA plan marketing. The comment period on the proposed rule closed on January 26, 2025.
Are There Restrictions on Payments to Agents/Brokers?
Yes. Compensation arrangements with MA plans and agents/brokers were the subject of scrutiny in 2025, considering commission payments are typical and the government has expressed concerns related to beneficiary steering and kickbacks. At a high level, the Anti-Kickback Statute (AKS) is a broad criminal law that prohibits knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service (drugs, supplies, health care services, etc.) payable by a federal health care program. 42 U.S.C. § 1320a-7b. The AKS prohibits anyone from making or receiving such referrals and extends both to direct referrals and activities that constitute arranging for referrals, such as marketing.
In May 2025, DOJ announced its intervention in a qui tam lawsuit against three major MA plans and three large insurance broker organizations, alleging that agents/brokers who sold MA plans between 2016 and 2021 received kickbacks from the plans that resulted in patient steering, while the agents simultaneously blocked the sale of other insurance plans that did not pay kickbacks. The original complaint in the case United States et al. v. eHealth, Inc. et al., Case No. 1:21-cv-11777, was filed by a whistleblower in 2021 and unsealed on May 1, 2025 by the US District Court for the District of Massachusetts. DOJ asserted, among other allegations, that the MA plans provided “marketing” or “sponsorship” fees that were described as administrative payments—when they really were disguised kickbacks—to get around price caps on agent/broker commissions. A hearing was held on January 21, 2026 on a joint motion to dismiss the complaint. A decision from the court is still pending.
Separately, but importantly, the District Court for the Northern District of Texas held, in August 2025, that CMS may only regulate how compensation is used and cannot engage in ratemaking. As such, the Court invalidated CMS’s rules regulating compensation paid to agents and brokers at 42 CFR §§ 422.2274(a), (c)-(e); 423.2274(a), (c)-(e) because the agency exceeded its statutory authority in setting price caps on MA plan payments to agents/brokers. Additionally, the court held that the rules were arbitrary and capricious because the agency failed to sufficiently respond to public comments during its rulemaking or explain its change in position from prior interpretations excluding administrative payments from restrictions on “compensation.” Americans for Beneficiary Choice v. United States Dep't of Health & Hum. Servs., No. 4:24-CV-00439-O, 2025 WL 2390849, at *1 (N.D. Tex. Aug. 18, 2025).
Looking Ahead to 2026
We anticipate continued government scrutiny of marketing arrangements under Medicare Advantage in 2026. MA plans should review their compensation structures and contract arrangements to ensure they are not relying on the vacated provisions of 42 CFR § 422.2274. MA plans should also review their compliance and agent/broker contracting practices to ensure that compensation or incentive structures focus on meeting beneficiaries’ healthcare needs, consistent with statutory objectives. Additionally, AKS safe harbor protections for agent/broker compensation arrangements should be considered.