CMS Cancels Marketplace Enrollments and Imposes Moratorium on New ACA Broker Registrations

The Centers for Medicare & Medicaid Services cancelled 760,000 individual enrollments in the Affordable Care Act Marketplaces and enacted a temporary moratorium on the registration of new agents and brokers for plan year 2027, effective September 22, 2026. The moratorium, together with enhanced verification requirements and mass disenrollments, signals a shift toward more aggressive oversight that will significantly affect health plans, agents, brokers, and consumers participating in the ACA Marketplace.

KEY TAKEAWAYS

• CMS cancelled enrollment in the ACA Marketplace for over 760,000 individuals (4% of total enrollees) that CMS found are “unauthorized” and plans to investigate an additional 440,000 individuals.
• CMS instituted a temporary moratorium on new agent and broker registrations for ACA Marketplace plans for the 2027 plan year, effective September 22, 2026.
• CMS foreshadowed future “system changes” that will apply to agents and brokers that assist individuals with enrollment applications.

BACKGROUND

The ACA Marketplace was created by the Affordable Care Act in 2010. It allows individuals to purchase health insurance coverage directly, rather than obtaining coverage through an employer. The states may operate their own individual Marketplaces or rely on the US Department of Health and Human Services (HHS) to operate the Marketplace for them. Marketplaces operated by HHS are known as Federally-Facilitated Marketplaces (FFMs). Currently, 30 states use this model, including two states that operate under a hybrid arrangement with the federal government.

Insurers sell qualified health plans through the Marketplace that are subject to federal requirements, such as essential health benefits and protections relating to preexisting conditions. Additionally, low-income individuals can qualify for tax credits that reduce the cost of premiums (although the enhanced premium tax credits that were enacted during COVID-19 expired in 2025). The open enrollment period for 2027 coverage begins on November 1, 2026.

In the past, there have been concerns raised related to improper Marketplace enrollment and inadequate verification controls. In September 2016, the Government Accountability Office (GAO) reported that 15 fictitious applications were initially approved coverage and subsidies during an undercover enrollment testing.

Over the past decade, CMS strengthened and formalized Marketplace program integrity controls by expanding electronic data matching, establishing documentary verification procedures for certain Special Enrollment Periods (SEP), conducting periodic checks for duplicate public coverage and deceased enrollees, and imposing additional verification where reported income conflicts with or cannot be corroborated by federal data. The scope of some controls—particularly SEP verification—has varied over time as CMS has balanced program-integrity concerns against the risk that verification requirements may impede enrollment by otherwise eligible individuals.

In 2024, CMS reported that it suspended 850 agents’ and brokers’ Marketplace Agreements for reasonable suspicion of fraudulent or abusive conduct. In 2025, the GAO reported preliminary results that fictitious accounts were again approved for coverage and subsidies—specifically, four applications in Plan Year 2024 and 20 in Plan Year 2025. Therefore, concerns remain and the Congressional Budget Office estimated in 2025 that 2.3 million enrollees improperly claimed the premium tax credit for 2025.

CORE DEVELOPMENTS AND RATIONALE

CMS’s interim final rule, published on September 23, 2026, imposed a temporary moratorium on the registration of agents and brokers in the FFMs. The moratorium applies specifically to those seeking to register for plan year 2027 who do not have an active Exchange Agreement for 2026. While the moratorium affects new agents/brokers seeking to register in the 30 FFMs, web brokers and those registering with state-based exchanges are not affected.

CMS justified the moratorium by citing substantial evidence of heightened risk among newly registered agents and brokers. CMS stated that it issued notices of intent to terminate to 100 agents/brokers in July 2026 and 469 agents/brokers in August 2026. CMS also cited the July 2026 Report by the US Government Accountability Office (GAO) that identified 299,604 consumer complaints tied to unauthorized enrollments in 2025.

CMS also noted that, on August 31, 2026, it canceled approximately 315,000 Plan Year 2026 policies covering more than 760,000 individuals after determining the policies were “unauthorized.” According to CMS, the enrollments were unauthorized because the individuals were “enrolled with agent or broker assistance without verified citizenship or immigration documentation and for whom [health plan] issuers were unable to identify claims or establish consumer contact.” See 91 Fed. Reg. 60317, 60323 (Sept. 23, 2026).

CMS indicated that it planned to investigate roughly 440,000 additional enrollees flagged for irregularities. CMS estimated that these actions will return approximately $2.2 billion in advance payments of the premium tax credit associated with canceled enrollments.

According to CMS officials, the health plans were asked to verify eligibility for nearly 1.2 million individuals. Enrollees were given 30 days to respond to the verification requests. Those who did not respond had their coverage cancelled. CMS asserted that the enrollment cancellations were “in accordance with CMS’ processes;” however, industry stakeholders have expressed concerns that the agency’s actions appeared to fall outside the normal process for verifying eligibility and questioned whether legitimate enrollments were cancelled.

Furthermore, considering the widespread issues health plans experienced during the post-COVID-19 Medicaid Unwinding (see our previous discussion in a Health Law Scan blog post) related to out-of-date contact information, it is possible that individuals who did not receive the verification request or did not respond in time had their coverage cancelled.  

Finally, CMS indicated it is in the process of implementing new system changes for Plan Year 2027 that will require agents and brokers to 1) obtain consumer electronic authorization prior to accessing or updating applications, 2) renew their identity proofing, 3) include consumer SSN or immigration document number on applications, and 4) refrain from assisting with certain applications.

IMPLICATIONS OR RECOMMENDATIONS

CMS’s moratorium and related enforcement measures represent a marked escalation in federal oversight of ACA Marketplace activities. For health plans, this means a need for continued and possibly expanded coordination with CMS regarding the identification and removal of unauthorized enrollments, as well as the recoupment of improper subsidies. Insurers may need to adjust their enrollment and risk projections, as the removal of low-utilization or fraudulent enrollees could impact the morbidity of the risk pool and affect pricing models.

Agents and brokers, particularly those seeking to enter the Marketplace, face significant new barriers to registration for plan year 2027 and heightened fraud enforcement. The moratorium, which is expected to remain in effect until February 1, 2027 unless lifted or extended, may result in operational and financial losses, as well as increased competition among existing agents and brokers. CMS estimated a transfer of $71 million to $98 million in commission revenue from new to existing agents and brokers during the moratorium period.