HHS Issues Guidance on Role Of Brokers in Online Insurance Markets

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By Sara Hansard  


States that operate their own online marketplaces under the health care reform law can establish rules on how much health insurers can pay brokers and agents who help people enroll for coverage, according to guidance issued May 1 by the Center for Consumer Information and Insurance Oversight (CCIIO).

“State-based Marketplaces [SBMs] may establish parameters for compensating agents and brokers, by direct compensation from the Marketplace, or by having issuers pay commissions,” the 12-page guidance on the role of agents, brokers, and web brokers in health insurance marketplaces said in a questions-and-answers section.

Federally facilitated marketplaces (FFMs), including state partnership marketplaces (SPMs), will not establish commission schedules or pay commissions directly to brokers and agents, the guidance said. “As is the case in the market today, we expect that the amount and terms of any commission would be negotiated by the issuer and the agent or broker,” it said.

But, the guidance added, the Department of Health and Human Services has established a standard for qualified health plans (QHPs) sold through the FFMs and federally facilitated Small Business Health Options Program (SHOP) marketplaces that requires issuers to pay brokers and agents the same compensation for enrolling people in similar plans sold outside of the marketplaces. The Centers for Medicare & Medicaid Services (the parent agency of CCIIO) “will re-evaluate this approach in the future,” the guidance said.

Thirty-three states currently are expected to have FFMs or SPMs, while 17 states and the District of Columbia have received conditional approval from HHS to operate their own state-based marketplaces. The marketplaces, being created under the Affordable Care Act, will open for enrollment Oct. 1. Moderate or low-income people must apply through the marketplaces to receive premium tax credit subsidies or enroll in Medicaid, and small businesses must apply for tax credits through the marketplaces.

Overview of Role of Brokers and Agents

The guidance gave an overview of the role of brokers and agents, including web brokers, in FFMs and SPMs; addressed questions that have been raised on the role of brokers in all of the online marketplaces being created under ACA; and addressed questions raised specifically about web brokers.

Brokers will play a role in educating consumers about the marketplaces, helping consumers receive determinations about eligibility for financial assistance or public health programs, compare plans, and enroll, it said. “In particular, CMS anticipates that agents and brokers will play a critical role in helping qualified employers and employees enroll in coverage through the Small Business Health Options Programs (SHOPs),” it said.


Brokers will play a role in educating consumers about the marketplaces, helping consumers receive determinations about eligibility for financial assistance or public health programs, compare plans, and enroll, the guidance says.  




Brokers can assist consumers using health insurance issuers' websites, or by using the marketplaces, it said. “As is the case today, agents and brokers will be appointed by issuers,” it said. The marketplaces will transmit identifying information about brokers to issuers so they can be paid.

Displaying All Plans an Issue

The guidance said that after consumers receive eligibility determinations, brokers can assist them in comparing plans and enrolling. However, Timothy Jost, a law professor with Washington and Lee University in Lexington, Va., who is a consumer liaison for the National Association of Insurance Commissioners, told BNA it is not clear if all plan choices will be displayed if a broker or agent uses an issuer's website.

If a broker or agent is using FFMs to assist consumers, “all QHP choices will be displayed,” it said. But state-based marketplaces have discretion over whether to require agents and brokers to display all QHPs, it added.

According to the guidance, CMS “will not require agents and brokers to facilitate enrollment into all available QHPs.”

CMS will be responsible for registering brokers and agents and conducting marketplace training for FFMs and SPMs, the guidance said. “To the extent permitted by a state … CMS intends to work with web-brokers that meet all applicable requirements to provide an alternate option to help consumers select QHPs online,” it said.

States will continue to license and regulate brokers and agents, including those who assist consumers in the marketplaces, it said. FFM training will not include state-specific training requirements in 2014, it said.

Brokers and agents should refer people who are found to be eligible for Medicaid or the Children's Health Insurance Program to state agencies responsible for those programs, the guidance said.

Three-Day Extension

At a conference on the marketplaces May 1, Chiquita Brooks-LaSure, CCIIO's deputy director of policy, said HHS extended the deadline for plans to apply to the FFMs until May 3, a three-day extension from the original April 30 deadline.

The extension was given to make sure insurers “had time to improve the quality of the work they were submitting. It was at the issuers' request.”

An official with the health insurance industry told BNA that a reason for the extension is that issuers have had trouble submitting their plans on HHS's computer system.

By Sara Hansard  

Guidance on the “Role of Agents, Brokers, and Web-Brokers in Health Insurance Marketplaces” is available in HealthDocs™.

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