Health insurance agents are intensely examining the rules issued to implement the new health insurance law in order to exploit the opportunities for involvement in the brave new world the law creates.
The new “let’s get down to work” attitude is gradually replacing the gloom-and-doom demeanor adopted by health insurance agents as to the future of their industry in the wake of enactment of the health insurance reform law in 2010.
Nothing exhibits this new attitude better than the reaction to the final and interim final rules published by the Obama administration March 12 designed to implement the health exchange system, which goes into effect in January 2014.
In its opening pages, the final rule explicitly states that, “health insurance issuers and agents and brokers are likely to play a significant role in the Exchange.”
The rules allow agents and brokers to enroll qualified individuals in exchange plans through private agent/broker websites, as long as the websites meet certain criteria.
Under the final rule, states will also be allowed to:
• allow agents and brokers to assist qualified employers and employees (as well as individuals) in enrolling in exchange plans (known as “qualified health plans (“QHPs”), and in submitting applications for premium tax credits and cost-sharing subsidies to help individuals pay for their insurance
• allow agents and brokers to participate in the “Navigator” program that is specifically designed to educate the public about exchanges and assist with enrollment
• display information about agents and brokers on the websites that exchanges will be required to set up to serve as an access portal for the public
The final rule also allows agents and brokers to participate in exchange boards and directs exchanges to consult regularly and on an ongoing basis with agents and brokers, among other stakeholders.
Lawyers who perused the rule but who declined to be quoted by name noted that another topic of interest to agents, brokers, and employers is the effect that the exchange framework might have on adverse selection in employer-based plans.
One law firm which declined to be identified by name said that in response to comments received on this issue, HHS opted to extend the initial open enrollment period from Oct. 1, 2013 to March 31, 2014 (extended from February 28, 2014 in the Proposed Rule) for the individual and Small Business Health Options Program (SHOP) markets.
The final rule maintained a 53-day annual open enrollment period for individuals, but provides that the SHOP program must permit a qualified employer to purchase coverage for its small group at any point during the year.
The final rule also contains special enrollment periods for “life changes” akin to the special enrollment standards used in the employer-based plan context.
One legal analysis said that the final rule fails to address some major disputed provisions in PPACA. For instance, the final rule does not address essential health benefits, details regarding a federal exchange to be operated in states that opt not to run their own exchanges, or regulations for state-HHS partnership exchanges.
The Industry Approves
Joel Wood, senior vice president, government affairs, for the Council of Insurance Agents and Brokers, said that the CIAB was grateful that the regulations respect the role that brokers can plan in the development of exchanges.
In fact, he said, “the regulations were probably as positive as we could have imagined on that front.”
That said, Wood added that there is nothing to compel the states to engage broker services. “We will have to be extremely vigilant as we enter into a critical stage of development as states race to have their exchanges certified by next year,” he said.
At the same time, Wood said that the Council’s substantive concerns about employee migration to exchanges have not changed.
“We believe the subsidy structure is unsustainable and threatens the employer-provided group health insurance marketplace,” he said. “That’s an underlying and deeply held political philosophy, not at all a reflection on the serious efforts made by Department of Health and Human Services’ officials to execute the best rules governing exchanges.”
Robert Miller, president of the National Association of Insurance and Financial Advisors, added that NAIFA was encouraged by the recognition for the role of the agent and broker.
He believed that the interim final rule which permits agents, brokers and private companies to sell coverage on the exchange to individuals and employers should be finalized. He added that state flexibility may result in more market-driven exchanges.
“NAIFA will continue to work with HHS to ensure maximum state flexibility is retained, and with the states to ensure all consumers have access to knowledgeable licensed professionals,” Miller added.
Among other positives, Miller said that NAIFA is pleased that its recommendations to HHS—to ensure that consumers continue to have access to the professional services of licensed and trained agents and brokers—were incorporated into the regulations.
Miller said that NAIFA will continue to work with HHS to ensure that the interim final regulations, when finalized, allow a state to permit agents and brokers to assist qualified individuals in applying for exchange-based premium subsidies and cost-sharing reductions, “and will urge HHS to include a meaningful role for agents in federal and ‘partnership’ exchanges”
“Similarly,” Mr. Miller added, “NAIFA will work with the states to help them create health insurance exchanges that incorporate a meaningful role for the agent.”
Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters, said that the group was pleased that agents and brokers are permitted to enroll independent of the Navigator program.
She said that NAHU always interpreted the Patient Protection and Affordable Care Act always interpreted PPACA as mandating that, but this clarifies it.
She cautioned that what remains open, however, is whether agents and brokers will be allowed to determine consumer eligibility for tax credits or cost-savings, or whether the exchanges will be the sole determinant of eligibility.
But, another legal analysis explicitly states that the final rule does not allow agents or brokers to determine eligibility for premium tax credits or subsidies, but agents and brokers may assist with the application process.
Waltman noted that the rules involving agent participation are interim final ones, with a 45-day comment period.
She said NAHU will concentrate in its comment letter on ensuring that this provision is proposed. “A priority will be ensuring that agents and brokers will be able to determine eligibility for cost-savings or subsidies,” she said.
Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America, added that the IIABA was encouraged by the administration’s recognition of the important role agents and brokers play in the health care marketplace, and that the regulations give states at least the option of allowing consumers access to trained, professional, and accountable health insurance advisors.
“The irony is that meanwhile, consumer access is being severely restricted to these advisors by the administration’s Medical Loss Ratio regulations,” Symington said.
At the same time, he said the IIABA does have a number of initial concerns and questions regarding the handling of the Navigator programs in the exchanges.
“We will be seeking clarity on these issues in the near future,” he said.
With Great Power Comes Great Flexibility