Consumer Protections for Web Brokers that Participate in the Health Insurance Marketplace

The issue of “direct enrollment” for marketplaces has become a hot topic in many states. “Direct enrollment” is when an insurer or broker facilitates a consumer’s enrollment in a marketplace plan, including enrollment in financial assistance, without that consumer ever visiting the official marketplace website. One way direct enrollment can happen is through web brokers—privately run websites that consumers can use to view plans from multiple insurance companies and to enroll in plans.

Allowing web brokers to enroll consumers in marketplace plans and financial assistance may help raise awareness of coverage options and increase enrollment. But there are drawbacks: Because web brokers receive compensation from insurance companies for enrolling people, those financial incentives could influence how web brokers market to and enroll consumers.

This brief outlines the consumer protections that federal regulations already require for these web brokers, and it recommends additional protections:

• Make consumers aware of web brokers’ financial incentives.
• Require web brokers to give consumers complete and accurate health plan information.
• Limit marketing on web broker sites.
• Protect consumer information collected by web brokers from misuse.
• Require marketplaces to establish formal systems to monitor web brokers, enforce consumer protections, and terminate web brokers when necessary.