Agent Advocacy in Action

We’re pleased to share important news that supports the work you do every day.

The Northern District of Texas ruled in favor of the challenge to CMS’s agent-and-broker compensation rule. The court struck down two major provisions:

• The $100 fixed limit on administrative payments.
• Restrictions on contract terms between carriers, FMOs, and agents.

The court found that CMS exceeded its authority and acted arbitrarily in establishing these new provisions. As a result, these provisions will not go into effect.

Why this matters to you

The decision allows agents and FMOs to continue to operate their business as they have historically without arbitrary caps on administrative fees or additional restrictions on contract terms. These core provisions of rule in question never went into effect, so no change.

Please note that the court upheld a separate portion of the rule that requires consent prior to sharing beneficiary information with another Third-Party Marketing Organization. This provision has been in effect since October 1, 2024, so again, no change.

Your voice matters, and we’re proud to help amplify it. Thank you for allowing us to stand with you in serving and protecting beneficiaries.

Frequently Asked Questions

Q: What happened with the recent court ruling?
On Monday, August 18, a federal court in Texas struck down parts of the 2024 CMS rule that capped administrative payments at $100 and restricted contract terms between carriers, FMOs, and agents. The court found CMS exceeded its authority and acted arbitrarily in creating these limits.

Q: Which parts of the CMS rule were vacated?

• The $100 cap on administrative fees.
• Restrictions on contract terms between carriers, FMOs, and agents.

These provisions are now officially off the books.

Q: What does this mean for our business?
The decision allows agents and FMOs to continue to operate their business as they have historically without arbitrary caps on administrative fees or additional restrictions on contract terms. These core provisions of the rule in question never went into effect, so no change.

Q: What parts of the CMS rule remain in place?
The court upheld the requirement to obtain consent prior to sharing personal beneficiary data with another Third-Party Marketing Organization (TPMO). This means that TPMOs must obtain consent before sharing beneficiary personal data with another TPMO, including an independent agent. This provision has been in effect since October 1, 2024, so again, no change.

Q: Does this change agent commissions?
The decision did not directly alter standard commission rates, but it removed the proposed $100 cap on administrative payments.

Q: What happens next?
The government may appeal the court’s decision. For now, however, the vacated provisions are no longer enforceable. We’ll keep you updated on any new developments.

Additional Insights:
https://www.beckerspayer.com

Learn how the right FMO partnership protects your business and empowers your growth → 
https://www.psmbrokerage.com/what-are-the-benefits-of-using-an-insurance-fmo