HHS Directly Acknowledges Broker Role

Clearly, the Broker community has turned a corner with HHS in terms of the federal government embracing the role of Brokers in health care reform efforts going forward. In the preamble to the regulations, HHS acknowledges the “significant” role of Brokers:

Comment: We received a number of comments stating that HHS should limit the number of consultations with health insurance issuers, agents, and brokers described in proposed § 155.130(j) and (k) to minimize any potential conflicts of interest. One commenter recommended that consultation with a health insurance issuer be made fully transparent, while several other commenters recommended that the consultation only include agents and brokers that enroll qualified individuals, employers, or employees. 
 
Response: We understand the concerns of commenters, but also acknowledge that health insurance issuers and agents and brokers are likely to play a significant role in the Exchange.* We encourage Exchanges to be transparent in the consultation process. Furthermore, in States where the Exchange is not housed in the department of insurance, we expect there to be regular consultation between the Exchange and the department of insurance, given the need for coordination between the two entities.

*Emphasis added by BenefitMall. Federal Register, Volume 77, Number 59 page 18321.

Brokers and Public Exchanges

Of paramount interest is the rule’s codification of section 1312(e) of the Affordable Care Act. Section 155.220(a)(3) provides states with many choices that will directly impact the relationship of Brokers to Exchanges. The provision:

• Includes the option to allow brokers to enroll individuals and employers in qualified health plans (QHP);
• Allows Exchanges to display information about Brokers on its Exchange website and in other materials made available to the public;
• Authorizes Brokers to provide assistance to qualified individuals applying for federal premium subsidies; and  
• Allows Brokers to assist individuals in applying for advance payments of the premium tax credit and federal premium subsidies.

In essence, the new rule allows Exchanges, vis-à-vis each state’s governance system, with the discretion to better utilize the market presence of Brokers, including web-based Brokers such as BenefitMall, that are licensed by the state to assist consumers in enrolling in QHPs in a state Exchange.

Many provisions of the rule govern the use of the Internet in providing services to consumers. The rule gives Exchanges the ability to authorize Brokers to use their own websites to assist individuals in completing the Qualified Health Benefit Plan selection process. The Broker's website must comply with the standards provided in Section 155.220(c)(3) and specific criteria governing web-based Brokers who enroll individuals and small group employees in QHPs. In particular, section 155.405 provides that web-based Brokers must utilize an Exchange-approved application to determine eligibility of applicants, and that the application must be done through the Exchange’s website in order to facilitate the identification of applicable federal premium subsidies and the transmission of enrollment information to the QHP carrier. Brokers must comply with the privacy and security provisions found in Sections 155.260 and 155.270, and are prohibited from providing financial incentives to steer enrollees to certain carriers. Finally, websites must allow consumers to withdraw from the Broker’s website at any time, and complete their application on the Exchange’s website.

In addition to the restrictions applicable to web-based Brokers, the new rule mandates that eligibility determinations remain the sole decision of each state health Exchange. However, these restrictions do not diminish the opportunity for Brokers to work with state Exchanges in the enrollment of all individuals and small group employees in the new state health benefit Exchanges.

States Ultimately to Define Role of Brokers

HHS also has made it clear that each state-based public Exchange can further define the role of Brokers:

Comment: Several commenters expressed support for the proposed §155.220(a) and the level of flexibility it affords State Exchanges to determine the role of agents and brokers and web-based entities in the Exchange marketplace. Several commenters specifically expressed support for the manner in which the accompanying preamble to the proposed rule described the Exchange as accountable for the actions of web-based entities.

Response: We accept the recommendation that Exchanges have the flexibility to determine the role of agents and brokers, including web-based entities, in their marketplaces. We have retained the language in § 155.220(a), which codifies the statutory flexibility that States may determine whether agents and brokers may enroll individuals, employers and employees in QHPs and provide assistance to qualified individuals applying for financial assistance.

Federal Register Volume 77, Number 59 page 18334.

This comment and response reminds the BenefitMall community that we will need to be vigilant in each state to make sure the role of Brokers is optimized in every public Exchange where we do business.

Exchanges Can Utilize Brokers in the Enrollment Process

Several comments and responses in the preamble shed further light on how Brokers will participate in the Public Exchanges:

Comment: With respect to proposed § 155.220(a), several commenters sought clarification of the role agents and brokers in enrolling individuals in QHPs. Several commenters urged us to strengthen the role of agents and brokers in the Exchange by further clarifying their ability to participate in the Exchange marketplace. With respect to the preamble discussion of web-based entities, several commenters urged HHS to permit web-based entities in particular to enroll individuals eligible for advance payments of the premium tax credit and cost-sharing reductions in QHPs so that such individuals may have access to the same avenues for QHP enrollment as those individuals who do not receive financial assistance.

Response: We accept the recommendation that we provide Exchanges with discretion to leverage the market presence of agents and brokers, including web-based entities that are licensed by the State (web brokers), to draw consumers to the Exchange and to QHPs.* We have amended § 155.220 to include minimum standards for the process by which an agent or broker may help enroll an individual in a QHP in a manner that constitutes enrollment through the Exchange. This is intended to include traditional agents and brokers, as well as web-brokers. This process must include the completion by the individual of a single streamlined application to determine eligibility through the Exchange’s Web site, as described in § 155.405; the transmission of enrollment information by the Exchange to the QHP issuer to allow the issuer to effectuate enrollment of qualified individuals in the QHP; and any standards set forth in an agreement between the agent or broker and the Exchange. We note that there may be various means a State may choose to integrate agents, brokers and web brokers consistent with the standards described in this section for enrollment through the Exchange. Agents and brokers may assist individuals enrolling directly through the Exchange Web site and may serve as Navigators consistent with standards described in § 155.210. We also afford Exchanges discretion to allow agents and brokers to use their own Web sites to assist individuals in completing the QHP selection process, as long as such a Web site conforms to the standards identified in §155.220(c)(3). While Exchanges that pursue this option would be able to leverage the market presence of web brokers in drawing consumers to the Exchange and QHPs, we note that the Exchanges will also have to share data and coordinate closely with such entities.

*Emphasis added by BenefitMall.  Federal Register Volume 77, Number 59 page 18335.

HHS further notes:

Comment: Some commenters recommended that proposed § 156.265(b) prohibit agents, brokers and Web-based entities from performing eligibility determinations.

Response: An agent, broker, or Web-based entity cannot perform eligibility determinations as part of enrollment through the Exchange. We note that section (b)(2)(A) of 36B of the Internal Revenue Code as amended by the Affordable Care Act establishes that an individual must enroll ‘‘through the Exchange’’ in order to access advance payments of the premium tax credit and cost-sharing reductions. However, in § 155.220(c)(1), we specify that an individual can be enrolled in a QHP through the Exchange with the assistance of an agent or broker only if the agent or broker ensures that the individual receives an eligibility determination through the Exchange Web site.*

*Emphasis added by BenefitMall.  Federal Register Volume 77, Number 59 page 18425.

States to Retain Primary Role in Setting Broker Standards

In the new regulations, HHS re-affirmed the traditional role of state licensing requirements for Brokers, but at the same time emphasized the importance of ensuring consumers are protected in the Exchange system when using web services.

Comment: With respect to proposed § 155.220(a), many commenters urged us to set standards around the use of agents and brokers in order to ensure certain consumer protections. These suggestions included having Exchanges to monitor and oversee all agents and brokers enrolling individuals and small groups in QHPs; establishing provisions to mitigate agents’ and brokers’ incentives to steer consumers to enroll in certain QHPs or to non-QHPs; setting uniform commissions for agents and brokers or establishing that issuers must compensate agents and brokers the same amount for Exchange and non-Exchange plans; prohibiting commissions for agents and brokers in the Exchange altogether; establishing certain disclosures by agents and brokers, including disclosure of their commission and whether or not the agent or broker has been the subject of any sanctions; applying privacy and confidentiality standards to agents and brokers; prohibiting Exchanges from directing individuals or small groups to enroll only through an agent or broker; prohibiting advertising by agents or brokers; or prohibiting agents and brokers from the Exchange altogether. A number of commenters also expressed concern regarding the role of third-party web-based entities enrolling individuals in QHPs. Several commenters emphasized that such external entities should be held to the same standards as the Exchange; should not be permitted to perform eligibility determinations; or should be held to certain consumer protection standards to prevent steering.

Response: We recognize the importance of consumer protections with respect to agents and broker interactions. We also recognize the States’ role in licensing and overseeing agents and brokers and have allowed States to determine which standards would apply to agents and brokers acting in the Exchange, if the State chooses to permit agents and brokers to enroll individuals and small groups in QHPs through the Exchange. In order to address commenters’ concerns while maintaining the State’s primary role in overseeing agents and brokers, we have added paragraph (d) to ensure that agents and brokers must comply with an agreement with the Exchange under which the agent or broker would comply with the Exchange’s privacy and security standards that are adopted consistent with § 155.260 and § 155.270. We have also added paragraph (e) to ensure that agents and brokers comply with applicable State law. We also recognize that the role of web-brokers may evolve upon implementation of Exchanges, and that Exchanges may seek to involve web brokers in the enrollment process using a variety of technologies. We have set forth standards in this rule to ensure that consumers enjoy a seamless experience with appropriate consumer protections if an Exchange chooses to allow web-brokers to participate in Exchange enrollment activities. In order to address commenters’ particular concerns around the role of web-based entities, we note that eligibility determinations must be conducted by the Exchange and enrollment information must be transmitted to the QHP issuer by the Exchange. We have added paragraph (c)(3) to § 155.220 to ensure that Web sites used by agents or brokers to enroll individuals in a manner that constitutes enrollment through the Exchange provide consumers with access to the same information as they would if they used the Exchange Web site instead. Based on several commenters’ suggestion that we address agents’ and brokers’ ability to steer or incentivize consumers to enroll in certain QHPs, and commenters’ general concern about the fact that the existence of such Web sites may confuse consumers, we have inserted standards under paragraph (c)(3) of this section to prevent such web-brokers from providing financial incentives and to establish that such Web sites must allow consumers to withdraw from the web broker’s process and use the Exchange Web site instead at any time. Furthermore, the web-brokers would also be subject to the standards inserted under paragraph (d) and (e) regarding compliance with an agreement with the Exchange and State law, respectively.

Federal Register Volume 77, Number 59 page 18335-6.

Navigator Concept Still a Challenge

Although the Broker role appears to be significant, Brokers still need to contend with Navigators that may assume a similar role in some of the public Exchanges. Here is an interesting comment and response in the new rule that sheds light on the issue:

Comment: A majority of commenters proposed that Navigators should not have to hold an agent or broker license or errors and omissions liability coverage in order to be certified or licensed as a Navigator. Conversely, a small number of commenters suggested that Navigators hold an agent or broker license as well as errors and omissions coverage and that Navigators should be subject to the same licensing and education standards established for agents and brokers.

Response: We accept the commenters’ suggestion that States and Exchanges should not be able to stipulate that Navigators hold an agent or broker license, and we clarify that States or Exchanges are prohibited from adopting such a standard, including errors and omissions coverage. ‘‘Agent or broker’’ is defined in § 155.20 as ‘‘a person or entity licensed by the State as an agent, broker, or insurance producer.’’ Thus, establishing licensure standards for Navigators would mean that all Navigators would be agents and brokers, and would violate the standard set forth § 155.210(c)(2) of the final rule that at least two types of entities must serve as Navigators. Additionally, we do not think that holding an agent or broker license is necessary or sufficient to perform the duties of a Navigator as these licenses generally do not address training, among other things, about public coverage options.

Federal Register Volume 77, Number 59 pages 18331-18332.

It’s important to understand the role of a Broker versus a Navigator. HHS provides differentiation in this comment and response, which implies that if a Broker becomes qualified as a Navigator, it might limit the Broker’s role outside of a public Exchange just like a Navigator’s limitation:

Comment: A number of commenters sought clarification on whether and how the involvement of agents and brokers described in proposed § 155.220 may serve as Navigators under § 155.210. Many commenters sought further clarification as to the distinction between the role of agents or brokers and the role of Navigators in the Exchange.

Response: In general, the responsibilities of a Navigator differ from the activities that an agent or broker. For example, the duties of a Navigator described under § 155.210(e) of the final rule include providing information regarding various health programs, beyond private health insurance plans, and providing information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange. Moreover, any individual or entity serving as a Navigator may not be compensated for enrolling individuals in QHPs or health plans outside of the Exchange; as such, an agent or broker serving as a Navigator would not be permitted to receive compensation from a health insurance issuer for enrolling individuals in particular health plans. That said, nothing precludes an Exchange’s Navigator program from including agents and brokers, subject to the conditions of § 155.210.

Federal Register Volume 77, Number 59 page 18334.