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Life Health > Health Insurance

Agents Hit Health Privacy Rule

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Key functions performed by insurance agents and brokers in placing group health insurance are threatened by a health privacy rule proposed by the U.S. Department of Health and Human Services, agent groups contend.

In statements filed with the department, agent groups say the proposed rule will not allow agents and brokers to obtain information necessary for such functions as amending, supplementing and replacing group health plans.

The groups noted that “to evaluate alternative and replacement benefit plans, group health plans must be able to obtain, use and share personally identifiable health information of plan enrollees. Prospective insurers cannot and will not price a group plan without specific information on the claims history of members of that plan.”

Agent groups filed two separate statements with HHS. One was a joint statement filed by the National Association of Insurance and Financial Advisors, the Independent Insurance Agents and Brokers of America, and the National Association of Professional Insurance Agents.

The Council of Insurance Agents and Brokers filed the other statement. Although the statements were filed separately, they track each other.

Specifically, the agents are concerned about a provision in the proposed rule that says any covered entity may disclose protected health information to another covered entity for “health care operations” only if two conditions are met.

The first condition is that both entities have a relationship with the affected individual. The second condition is that the disclosure falls under one of the first two paragraphs of the definition of health care operations, or is necessary to detect health care fraud.

However, agents say both conditions will impair the ability of group health plans to add benefits or replace existing contracts. First, they say, neither agents and brokers nor carriers will have a “relationship” with the affected individual. “That is simply not how the group health market works.”

Insurance agents and brokers and potential new insurers will have a relationship with the employer or plan sponsor, they say, and the individual will have a relationship with the current insurance carrier. “Accordingly, this condition on its own will preclude a plan–through its agent or broker or otherwise–from obtaining claims information from its health insurance carriers that is necessary to obtain premium quotes on supplemental and/or replacement coverages,” the groups said.

As for the second condition, they said that underwriting and premium rating are not in the first two paragraphs of the definition of “health care operations.” Rather, they noted, they are in the third paragraph, and thus are not among the reasons why protected health information may be disclosed.

The groups are asking HHS to revise the rule to state specifically that a covered entity other than a health care provider may disclose protected health information for underwriting or premium rating activities.

This poses no threat to consumer privacy rights, the agents say. Agents and brokers are covered entities under the rules, and their own use and disclosure of protected information is limited by the privacy regulations.

The groups say that allowing disclosure for underwriting and premium rating activities is “absolutely necessary” for agents and brokers to service group health plans.

Reproduced from National Underwriter Life & Health/Financial Services Edition, May 6, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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