CMS Finalizes Rule Change Applying Preponderance of the Evidence Standard to Agent, Broker, and Web-Broker Exchange Agreement Terminations for Cause

In its recently issued Final Rule (CMS-9884-F; 90 FR 27074-01; the Final Rule), the Centers for Medicare and Medicaid Services (CMS) finalized revisions to 45 C.F.R. § 155.220(g)(2) to specify a standard of proof for Affordable Care Act Exchange agreement terminations for cause. CMS also added a definition for that standard in 45 C.F.R. § 155.20 (that definition stating: “preponderance of the evidence means proof by evidence that, compared with evidence opposing it, leads to the conclusion that the fact at issue is more likely true than not”). The below excerpt shows CMS’ change to Section 155.220(g)(2) as it will become effective on August 25, 2025 (the new/added language is shown in underlined type):

(g) Standards for termination for cause from the Federally-facilitated Exchange.

(1) If, in HHS’ determination, a specific finding of noncompliance or pattern of noncompliance is sufficiently severe, HHS may terminate an agent’s, broker’s, or web-broker’s agreement with the Federally-facilitated Exchange for cause.

(2) An agent, broker, or web-broker may be determined noncompliant under paragraph (g)(1) of this section if HHS finds by a preponderance of the evidence that the agent, broker, or web-broker violated-

(i) Any standard specified under this section;

(ii) Any term or condition of the agreement with the Federally-facilitated Exchanges required under paragraph (d) of this section, or any term or condition of the agreement with the Federally-facilitated Exchange required under § 155.260(b);

(iii) Any State law applicable to agents, brokers, or web-brokers, as required under paragraph (e) of this section, including but not limited to State laws related to confidentiality and conflicts of interest; or

(iv) Any Federal law applicable to agents, brokers, or web-brokers.

In attempting to predict how the new standard will affect agent, broker, and web-broker compliance and interactions with CMS following implementation of the Final Rule in August, some information can be gleaned from CMS’ contextual discussion of the new standard in the Final Rule. First, in its summary of the rule change, CMS states as shown below (emphasis added in bold type), citing the desire for procedural transparency and increased accountability.

We are finalizing revisions to § 155.220(g)(2) to require HHS to apply a “preponderance of the evidence” standard of proof for terminations for cause by HHS of an agent’s, broker’s, or web-broker’s Exchange agreements under § 155.220(g)(1). We are also finalizing the addition of the definition for “preponderance of the evidence” at § 155.20. We believe this change will improve transparency in the process for holding agents, brokers, and web-brokers accountable for compliance with applicable law, regulatory requirements, and the terms and conditions of their Exchange agreements. This change is a consumer protection unrelated to the subsidy levels set by Congress. We finalize this standard to be applicable upon the effective date of this final rule and beyond.

Second, one of CMS’ main stated rationales for adopting the “preponderance of the evidence” standard (as opposed to other evidentiary standards) was that Federal civil and administrative cases use the preponderance of the evidence standard. In its detailed description of the rule change, CMS stated as shown below (key language is shown in bold type).

2. Standards for Termination of an Agent’s, Broker’s, or Web-Broker’s Exchange Agreements for Cause (§ 155.220(g)(2))

As discussed in the 2025 Marketplace Integrity and Affordability proposed rule and this final rule, there have been dramatic levels of improper enrollments involving agents, brokers, and web-brokers. Examining agent, broker, and web-broker practices and taking enforcement action against noncompliant agents, brokers, and web-brokers is critical to program integrity and safeguarding consumer personally identifiable information (PII), and HHS is committed to holding noncompliant agents, brokers, and web-brokers accountable to protect Exchanges and consumers. In the 2025 Marketplace Integrity and Affordability proposed rule (90 FR 12955 and 12956), we proposed to amend § 155.220(g)(2) to improve transparency in the process for holding agents, brokers, and web-brokers accountable for compliance with applicable law, regulatory requirements, and the terms and conditions of their Exchange agreements. [FN61]

*27099 Section 1312(e) of the ACA provides that the Secretary shall establish procedures under which a State may allow agents or brokers to enroll individuals and employers in any QHPs in the individual or small group market as soon as the plan is offered through an Exchange in the State; and to assist individuals in applying for PTC and CSRs for plans sold through an Exchange. Regulations at 45 CFR 155.220 implement this statutory requirement. [FN62] Among other things, § 155.220 includes termination for cause standards in paragraphs (g)(1) through (3), which generally provide that if, in HHS’ determination, a specific finding of noncompliance or pattern of noncompliance is sufficiently severe, HHS may terminate an agent’s, broker’s, or web-broker’s agreements with the FFE for cause. Consistent with § 155.220(l), the termination for cause standards apply to agents, brokers, and web-brokers participating in SBE-FPs. Paragraph (h) sets forth procedures for subsequent review (that is, “reconsideration”) of the termination action.

We proposed to improve transparency in the process for holding agents, brokers, and web-brokers accountable for noncompliance with applicable law, regulatory requirements, and the terms and condition of their Exchange agreements. Specifically, we proposed to add text to § 155.220(g)(2) stating that HHS would apply a “preponderance of the evidence” standard of proof with respect to issues of fact to assess potential noncompliance under § 155.220(g)(1) and make a determination there was a specific finding or pattern of noncompliance that is sufficiently severe. We proposed at § 155.20 to capture a new definition, similar to definitions adopted by other HHS agencies and offices, [FN63] which would state that “preponderance of the evidence” means proof by evidence that, compared with evidence opposing it, leads to the conclusion that the fact at issue is more likely true than not. [FN64]

In proposing the preponderance of the evidence standard, we considered the severity of the potential consequences involved in our termination for cause framework in § 155.220(g)(1) through (3), [FN65] and how evidentiary standards have traditionally been used in court cases. Federal administrative and civil cases generally use a preponderance of the evidence standard, while criminal cases, in order to sustain a conviction, demand the highest standard, guilt “beyond a reasonable doubt,” under which evidence must be so strong that there is no reasonable doubt about a defendant’s guilt. [FN66] Between those two evidentiary standards are the “clear and convincing evidence” standard, under which a trier of fact must have an abiding conviction that the truth of the factual contention is “highly probable,” [FN67] and the “substantial evidence” standard, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. [FN68]

As stated in the proposed rule (90 FR 12956), HHS is of the view that the preponderance of the evidence standard is appropriate in our termination for cause framework under § 155.220(g)(1) through (3) because it is the standard used in most Federal civil cases and administrative proceedings. However, we stated in the proposed rule that we also appreciate that the termination of an agent’s, broker’s, or web-broker’s Exchange agreements may affect their State licensure, given that we inform State insurance oversight agencies of these enforcement actions. [FN69] In addition, after the applicable period in § 155.220(g)(3) elapses and the Exchange agreement(s) under § 155.220(d) are terminated, the agent, broker, or web-broker will no longer be permitted to assist with or facilitate enrollment of a qualified individual in coverage in a manner that constitutes coverage through an FFE or SBE-FP, or be permitted to assist individuals in applying for APTC and CSRs for QHPs offered through an FFE or SBE-FP. [FN70] Once an agent’s, broker’s, or web-broker’s Exchange agreements are terminated, they are unable to assist with applying for or enrolling in QHPs offered through the Exchange in any of the more than 30 States served by Exchanges on the Federal platform. Given these potential consequences, we sought comment not only on the proposal to use a “preponderance of evidence” standard of proof in assessing potential noncompliance under § 155.220(g)(1), but also whether a different standard would be more appropriate to make a determination there was a specific finding or pattern of noncompliance by agents, brokers, and web-brokers that is sufficiently severe. We also sought comment on our proposed definition for this new “preponderance of evidence” standard.

In addition, we stated in the proposed rule (90 FR 12956) that we intend to provide greater specificity and precision in the Exchange agreements for PY 2026 and beyond regarding impermissible conduct by agents, brokers, and web-brokers, and to address the requirements for ensuring agents, brokers, and web-brokers have obtained and documented receipt of consumer consent to collect their personally identifiable information and help them apply for and/or enroll in QHP coverage offered through the applicable FFE or SBE-FP. These changes will provide additional, clear guidance to agents, brokers, and web-brokers, as well as additional information on how HHS will address compliance failures. In the proposed rule, we solicited comment on what should be addressed in the Exchange agreements for PY 2026 and beyond, States’ oversight practices, guidance for obtaining and documenting consumer consent, how to protect consumers from improper enrollments, and oversight enhancement for agents, brokers, and web-brokers.

After consideration of comments and for the reasons outlined in the proposed rule and in our responses to comments later in this section of this final rule, we are finalizing this provision as proposed. These provisions are important consumer protections that address longstanding concerns with enforcement against noncompliant agents, brokers, and web-brokers. As these concerns exist regardless of the subsidy levels set by Congress, we are finalizing these provisions to be *27100 applicable as of the effective date of this rule and beyond. We summarize and respond to public comments received on the use of a “preponderance of the evidence” standard when taking enforcement actions for agent, broker, and web-broker noncompliance under § 155.220(g)(1) through (3) later in this section, as well as on our proposed definition of “preponderance of the evidence” in § 155.20.

Finally, CMS’ responses to comments submitted on the proposed version of the rule issued in March (CMS-9884-P; 90 FR 12942-01) provide additional context. In particular, some commentors objected to the proposal to add a preponderance of the evidence standard on the basis that the standard would be too demanding, would lead to terminations for minimal errors, or would infringe on agent and brokers’ due process rights. Other commentors speculated that the change could discourage agents and brokers from assisting individuals to enroll and limit availability of coverage for vulnerable populations. CMS disagreed with these commentors, primarily relying on its rationale that Federal civil and administrative cases use the standard, and that subsection 155.220(g)(1) only permits termination “if, in HHS’ determination, a specific finding of noncompliance or pattern of noncompliance is sufficiently severe . . .” Below, we excerpt the portions of the Final Rule describing these key objecting comments and CMS’ responses thereto (key language from the commentors and CMS are in bold type).

Comment: We received several comments stating that the “preponderance of the evidence” standard is too demanding of an evidentiary standard to use to assess potential noncompliance by agents, brokers and web-brokers. In particular, commenters asserted that adopting the “preponderance of the evidence” standard would make it too easy for CMS to terminate agent, broker, and web-broker Exchange agreements, punish agents, brokers, and web-brokers for “minimal” errors, eliminate agent, broker, and web brokers’ due process rights, and deprive agents, brokers, and web-brokers of their livelihoods.

Response: We disagree with comments asserting that the proposed standard is inappropriate for use in our termination for cause framework under § 155.220(g)(1) through (3). As we explained previously in this final rule and in the proposed rule, in proposing the preponderance of the evidence standard, we considered how evidentiary standards have traditionally been used in court cases and the severity of the potential consequences involved in our termination for cause standards framework in § 155.220(g)(1) through (3), including those consequences’ impact on the ability of agents, brokers, and web-brokers to assist consumers with enrollment in coverage through the FFEs and SBE-FPs. Federal administrative and civil cases generally use a preponderance of the evidence standard, while criminal cases, in order to sustain a conviction, demand the highest standard, guilt “beyond a reasonable doubt,” under which evidence must be so strong that there is no reasonable doubt about a defendant’s guilt. Between those two evidentiary standards are the “clear and convincing evidence” standard, under which a trier of fact must have an abiding conviction that the truth of the factual contention is “highly probable,” *27101 and the “substantial evidence” standard, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. In the proposed rule, we explained—and we continue to believe—that the preponderance of the evidence standard is appropriate in our termination for cause framework under § 155.220(g)(1)-(3) because it is the standard used in most Federal civil cases and administrative proceedings.

In addition, using the preponderance of the evidence standard will ensure that when an agent, broker, or web-broker is subject to enforcement action under § 155.220(g)(3)(i), CMS will generally terminate their Exchange agreements unless the evidence they submit to resolve the matter to CMS’ satisfaction consists of proof that, compared with the evidence supporting CMS’ determination of a specific finding or pattern of noncompliance that is sufficiently severe, leads to the conclusion that the agent, broker, or web-broker was more likely than not compliant with applicable law, regulatory requirements, and the terms and condition of their Exchange agreements. This will help ensure that agents, brokers, and web-brokers are held accountable for noncompliance with applicable law, regulatory requirements, and the terms and condition of their Exchange agreements, prevent agents, brokers, and web-brokers who are noncompliant from assisting consumers with enrollment in coverage through the FFEs and SBE-FPs, and support consistent decision-making in our enforcement actions under § 155.220(g)(1) through (3).

With respect to commenters’ points that this evidentiary standard will punish agents, brokers, and web-brokers for “minimal” errors and deprive them of their livelihoods, we remind commenters that CMS only takes enforcement action under § 155.220(g)(3)(i) when, in its determination, an agent, broker, or web-broker’s conduct reflects a specific finding of noncompliance or pattern of noncompliance that is sufficiently severe, and an agent, broker, or web-broker may be determined noncompliant only if CMS finds that they violated applicable law, regulatory requirements, or the terms and condition of their Exchange agreements. [FN71]

As to commenters’ claim that this evidentiary standard eliminates agents, brokers, and web-brokers’ due process rights, we remind commenters that this policy only finalizes an evidentiary standard used in enforcement actions under § 155.220(g)(1) through (3). When an agent, broker, or web-broker is subject to enforcement action under § 155.220(g)(3)(i), CMS will notify the agent, broker, or web-broker of the specific finding of noncompliance or pattern of noncompliance made under paragraph (g)(1) of this section, and the agent, broker, or web-broker has 30 days from the date of the notice to resolve the matter to CMS’ satisfaction. If the agent, broker, or web-broker does not submit rebuttal evidence resolving the matter to CMS’ satisfaction and CMS terminates their Exchange agreements under § 155.220(g)(3)(i), the agent, broker, or web-broker has the right to submit a request for reconsideration to the CMS Administrator within 30 calendar days of the written notice from CMS. [FN72] The CMS Administrator will provide the agent, broker, or web-broker with a written notice of the reconsideration decision within 60 calendar days of the date the CMS Administrator receives the request for reconsideration, and this decision will constitute the agency’s final determination. [FN73] Use of the “preponderance of the evidence” standard to determine whether an agent, broker, or web-broker violated applicable law, regulatory requirements, or the terms and condition of their Exchange Agreement(s) does not alter this existing rebuttal and appeal framework. [FN74]

[…]

Comment: A few commenters stated applying a “preponderance of the evidence” standard will increase agent, broker, and web-broker scrutiny, leading to a reduction in the number of agents, brokers, and web-brokers who will be willing to assist consumers with enrollment through the SBE-FPs and FFEs in the future.

Response: We believe that adoption of the “preponderance of the evidence” standard is unlikely to increase agent, broker, and web-broker scrutiny in a manner that will reduce the number of agents, brokers, and web-brokers willing to assist consumers with enrollment through the SBE-FPs and FFEs in the future. As we explained previously in this final rule, in proposing the preponderance of the evidence standard, we considered how evidentiary standards have traditionally been used in court cases and the severity of the potential consequences involved in our termination for cause standards framework in § 155.220(g)(1) through (3), including those consequences’ impact on the ability of agents, brokers, and web-brokers to assist consumers with enrollment in coverage through the FFEs and SBE-FPs. We considered but declined to adopt several evidentiary standards that demanded that agents, brokers, and web-brokers subject to enforcement action under § 155.220(g)(1) through (3) meet a higher evidentiary bar, and we decided that the preponderance of the evidence standard is appropriate in our termination for cause framework under § 155.220(g)(1) through (3) because it is the standard used in most Federal civil cases and administrative proceedings.

In addition, as we explained previously in this final rule, our adoption of the “preponderance of the evidence” standard will enhance transparency for agents, brokers, and web-brokers and enhance public trust in the FFEs and SBE-FPs, which in turn may spur consumers to enroll in coverage through the FFEs and SBE-FPs with the assistance of agents, brokers, *27102 and web-brokers. We believe that this increased transparency for agents, brokers, and web-brokers and improved public trust are likely to encourage agents, brokers, and web-brokers to continue assisting consumers with enrollment through the FFEs and SBE-FPs.

[…]

Comments: Some commenters suggested that applying a “preponderance of the evidence” standard will increase the cost of healthcare, limit availability for vulnerable populations, and increase discrimination against consumers. Commenters also suggested that States should have sole jurisdiction to agent, broker, and web-broker oversight.

Response: We disagree with comments asserting that applying a preponderance of the evidence standard in the context of enforcement actions under § 155.220(g)(1) through (3) will increase the cost of healthcare, limit availability for vulnerable consumers, or increase discrimination. The proposed “preponderance of the evidence” standard will have no direct effect on the pricing or availability of health insurance available to consumers in FFE and SBE-FP States. [FN75] If commenters intended to suggest that use of the “preponderance of the evidence” standard will deter agents, brokers, and web-brokers from assisting consumers with enrollment through the FFEs and SBE-FPs and thereby reduce healthcare accessibility and affordability and increase discrimination, we refer commenters to previous discussion in this section of this final rule explaining our belief that adopting the “preponderance of the evidence” standard in enforcement actions under § 155.220(g)(1) through (3) is likely to encourage agents, brokers, and web-brokers to continue assisting consumers with enrollment through the FFEs and SBE-FPs.

We remind commenters that section 1312(e) of the ACA states the Secretary shall establish procedures under which a State may allow agents or brokers (1) to enroll individuals and employers in any QHPs in the individual or small group market as soon as the plan is offered through an Exchange in the State; and (2) to assist individuals in applying for premium tax credits and cost-sharing reductions for plans sold through an Exchange. Section 1321(a)(1) of the ACA authorizes the Secretary to promulgate regulations for meeting the requirements of Title I of the ACA (which includes section 1312 of the ACA) with respect to the establishment and operation of Exchanges, the offering of QHPs through such Exchanges, and such other requirements as the Secretary determines appropriate. Finally, Section 1313(a)(5)(A) of the ACA directs the Secretary to provide for the efficient and non-discriminatory administration of Exchange activities and implement any measure or procedure the Secretary determines is appropriate to reduce fraud and abuse in the administration of Title I of the ACA.

In conclusion, it is difficult to predict exactly how the new standard will impact agents, brokers, and web-brokers following the August 25, 2025, effective date. However, compliance personnel should take the new standard into consideration as they analyze the terms of their Exchange agreements and document alignment with such terms.