The eHealth lawsuit is a federal False Claims Act case, United States ex rel. Shea v. eHealth, Inc., et al., accusing the online insurance broker of accepting hundreds of millions of dollars in illegal kickbacks from Medicare Advantage insurers between 2016 and 2021 and steering elderly and disabled beneficiaries into whichever plans paid eHealth the most.1United States ex rel. Shea v. eHealth, Inc., et al., No. 21-cv-11777-DJC (D. Mass.) The case also alleges eHealth helped insurers keep disabled beneficiaries off their rolls. In March 2026, a federal judge in Massachusetts denied nearly all of the defendants’ motion to dismiss, and the case is now moving into discovery.
How the Case Started
The lawsuit began as a sealed whistleblower complaint filed on November 2, 2021, by Andrew Shea, eHealth’s former senior vice president of marketing. Shea filed under the False Claims Act’s qui tam provision, which lets private individuals sue on the government’s behalf and share in any recovery.
The Department of Justice investigated for more than three years before announcing on January 13, 2025, that it would partially intervene. The government filed its own complaint on May 1, 2025, naming six defendants: insurers Aetna (a unit of CVS Health), Elevance Health (formerly Anthem), and Humana, along with brokers eHealth, GoHealth, and SelectQuote.
What the Kickback Claims Allege
The DOJ says the three insurers paid the three brokers hundreds of millions of dollars structured to look like marketing development, technology, or administrative fees, but functioning as per-enrollment kickbacks for steering seniors into specific Medicare Advantage plans.
The complaint quotes eHealth’s own communications. In one exchange, an eHealth executive described a $15-million-per-year payment from Humana for a website that generated only about 15 enrollments a year, joking that federal regulators would “surely never figure that one out.” Discussing an Aetna arrangement, another executive called it “not even a little compliant” and said that if Aetna were audited by the Centers for Medicare and Medicaid Services, “they’d be fu[**]ed.”
The DOJ alleges eHealth ran a “Lead Scoring System” that graded each incoming call for its revenue potential and then routed callers to agents who sold plans exclusively for the highest-paying insurer. The company’s chief marketing officer described in a 2018 internal document how eHealth assessed each call for its “propensity to create revenue” and directed it accordingly. Publicly, eHealth marketed itself as an “unbiased” and “carrier-agnostic” Medicare resource.
According to the relator’s amended complaint, marketing development fund payments grew from about 24 percent of eHealth’s Medicare segment profits in 2018 to nearly 66 percent by 2020.
The Discrimination Allegations
A second set of allegations may carry broader legal weight. The government claims Aetna and Humana pressured brokers, including eHealth, to limit the enrollment of Medicare beneficiaries under age 65 who qualify through disability. Insurers referred to these individuals internally as “U65” beneficiaries and viewed them as less profitable because they tend to use more medical care.
The DOJ says the insurers threatened to withhold kickback payments unless brokers reduced the share of disabled beneficiaries enrolling in their plans. In response, eHealth and the other brokers allegedly rejected referrals of disabled beneficiaries, filtered phone calls to avoid connecting with them, and steered disabled callers away from Aetna and Humana plans. Some brokers also allegedly disabled online enrollment buttons and halted telephone sales in certain states.
Medicare Advantage is a guaranteed-issue program, and federal law bars insurers from discriminating based on health status or disability. Insurers’ contracts with CMS require them to certify compliance with anti-discrimination rules. The DOJ’s theory is that by working secretly to exclude disabled beneficiaries while certifying compliance, the insurers submitted false claims for every capitation payment they received from the government for those enrollees.
What the Judge Ruled on the Motion to Dismiss
On March 25, 2026, Chief Judge Denise Casper of the U.S. District Court for the District of Massachusetts denied nearly all of the defendants’ motion to dismiss.
On the kickback claims, Judge Casper held that the substance of the payment arrangements controls the analysis, not the labels in the contracts. The court rejected the defendants’ argument that enrollment in a Medicare Advantage plan is not an “item or service” under the Anti-Kickback Statute, finding the statute is not limited to direct patient care. The court also found the government had adequately linked the alleged kickback arrangements to specific false claims submitted to CMS.
On the discrimination claims, the court endorsed what commentators have called a novel False Claims Act theory: that the insurers’ false certifications of compliance with anti-discrimination rules were material to the government’s decision to pay. Judge Casper wrote that compliance with non-discrimination requirements goes “to the very essence of the bargain” between Medicare Advantage organizations and CMS, and that intentionally minimizing the enrollment of disabled beneficiaries “directly undercuts the purpose of the MA program.”
The court also ruled that brokers who do not directly submit claims to CMS can still face liability if they “knowingly caused” the submission of false claims. The only claim dismissed was Count VIII, an unjust enrichment theory, on the grounds that the False Claims Act itself provides an adequate remedy.
Where the Case Stands Now
The defendants filed a motion for partial reconsideration on April 30, 2026, arguing that Judge Casper’s opinion merged two distinct concepts under the Anti-Kickback Statute and that her reading of “items or services” created a “nonsensical loop.” The government opposed the motion on May 8, 2026. All six defendants filed formal answers to the complaint on May 22, 2026, and a scheduling order followed on May 27, 2026. The case has not reached discovery deadlines or a trial date.
The insurers have publicly disputed the allegations and said they will defend themselves. Their core legal positions, visible mainly through their filings, are that the payments to brokers were legitimate administrative and marketing fees and that the Anti-Kickback Statute does not reach Medicare Advantage enrollments the way the government claims. At least one insurer told the court that whistleblower Andrew Shea “snapped unauthorized photos of company files” during his time at eHealth.
The Wider Medicare Advantage Enforcement Push
The eHealth case is part of a broader federal effort focused on Medicare Advantage marketing. In December 2024, the HHS Office of Inspector General issued a special fraud alert warning about abusive compensation arrangements between Medicare Advantage insurers and third-party marketers. The OIG also updated its compliance guidance for Medicare Advantage for the first time since 1999, specifically flagging agent and broker payment structures as high risk.
The DOJ’s newly created National Fraud Enforcement Division has identified Medicare kickbacks as a priority, and a reestablished DOJ-HHS False Claims Act Working Group has focused on Medicare Advantage. Recent related actions include a $60 million settlement by Oak Street Health over alleged kickbacks to brokers and a $117.7 million settlement by Aetna in a separate case involving Medicare Advantage risk-adjustment coding. One expert quoted in reporting on the eHealth matter called it the “most significant enforcement action to date” on broker compensation in Medicare Advantage and the first to target “large-scale, systemic efforts” of this kind.
The enforcement picture is complicated by a competing ruling. In August 2025, U.S. District Judge Reed O’Connor in the Northern District of Texas vacated a CMS rule that had capped administrative fee payments to Medicare Advantage brokers and restricted certain contract terms between insurers and marketing organizations. Judge O’Connor held that CMS may regulate how compensation is used but lacks authority to set rates, calling the caps “arbitrary and capricious.” That decision, in Americans for Beneficiary Choice et al. v. HHS, left a regulatory gap that defendants in the eHealth case may try to exploit.
A Constitutional Threat to the Whole Case
A separate legal thread could reshape the eHealth lawsuit indirectly. In United States ex rel. Zafirov v. Florida Medical Associates, a federal district court in Florida ruled in September 2024 that the False Claims Act’s qui tam provision is unconstitutional under the Appointments Clause, holding that whistleblower-relators exercise “significant authority” that can only be conferred by presidential appointment. If that view prevails, it would undermine the mechanism that allowed Andrew Shea to bring this case in the first place.
Zafirov is on appeal at the Eleventh Circuit, which heard oral arguments in December 2025. The Fifth, Sixth, Ninth, and Tenth Circuits have upheld the constitutionality of qui tam provisions, so an affirmance would create a circuit split likely to draw Supreme Court review, potentially by 2027. The eHealth case sits in the First Circuit, where the mechanism has not been struck down, but a Supreme Court ruling against qui tam would apply nationwide.