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5 things health agents need to know about the NAIC meeting

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State health insurance regulators have been pondering the effects of the November elections this week at the fall meeting of the National Association of Insurance Commissioners (NAIC).

The NAIC’s Health Insurance and Managed Care Committee and its units have been focusing heavily on implementing the Patient Protection and Affordable Care Act (PPACA) since President Obama signed the act into law in 2010.

Now both chambers of Congress and a majority of state governorships are in the hands of Republicans who either oppose the PPACA provisions that affect commercial health insurance or have mixed feelings about those provisions.

While at the NAIC fall meeting, in Washington, D.C., regulators have also been going about the everyday business of reviewing and updating old regulations.

See also: 5 battles over the PPACA-free zone

The NAIC cannot set state laws or regulations directly, but it often shapes what state policymakers do, and agents and brokers who ignore it may find the world around them going through inexplicable changes.

For more on what health insurance regulators have been up to in Washington, read on.

Obama signs PPACA

1. The Health Insurance and Managed Care Committee approved drafts of the Individual Health Insurance Coverage Model Regulation and the Small Group Market Health Insurance Coverage Model Regulation.

The models would be companions to the Individual Market Health Insurance Coverage Model Act and the Small Group Health Insurance Coverage Model Act. The model regulations could affect matters such as which companies are classified as health insurance issuers and when patients can get out of having to pay the full out-of-network price for out-of-network care.

Image: President Obama signs the bill that created PPACA. (AP photo/J. Scott Applewhite)

Network of lines that form a star

2. Regulators spent a lot of time thinking about health plan provider networks.

Sabrina Corlette and Sally McCarty of the Center on Health Insurance Reforms, an arm of Georgetown University, presented a major report on a topic of great interest — determining when a health plan’s provider network is big enough. The speakers encouraged regulators to try using the network adequacy planning tool at to see if actual plan networks are adequate.

Stephanie Mohl of the American Heart Association (AHA) presented a report for consumer representatives on how states now handle network adequacy regulation. 

The NAIC already has a network adequacy model act, but few states have adopted it either in whole or in part, and states use a variety of different, conflicting codes to track patients’ network adequacy complaints, Mohl said.

State regulators told the consumer reps that their biggest network-related challenge is ensuring that consumers understand the cost of getting care out-of-network.

Fewer than the half of the states have transparency requirements for out-of-network doctors who are providing care for a patient who is in an in-network hospital.

See also: More skirmishes from the provider network war

Refuse to enroll (in the exchange) flier

3. The PPACA panel for states that are not enthusiastic about PPACA met.

The NAIC’s Health Care Reform Regulatory Alternatives Working Group heard a presentation from the American Enterprise Institute on PPACA-related litigation and a presentation from the U.S. Chamber of Commerce on the definition of “small employer.”

The working group also talked about an “innovation waiver” effort in Hawaii.

PPACA itself includes an “innovation waiver” provision, and some PPACA opponents see use of innovation waivers as a strategy for moderating the effects of PPACA.

See also: Medicaid alternative architect drafting PPACA 2.0 proposal


4. The group drafting new stop-loss rules is thinking it may come out with more drafts after it goes over the current draft.

The Employee Retirement Income Security Act (ERISA) Working Group talked about a draft of a stop-loss insurance paper it posted in November. 

See also: The new PPACA stop-loss guidance: What agents should know

The working group has been looking into the matter in part because some insurers and regulators have raised the possibility that some small employers might try to evade PPACA rules that apply to fully insured group plans by becoming self-insured. Some have suggested that small employers might try to self-insure without really self-insuring by using stop-loss plans — insurance plans for health plans — with very low “attachment points,” or deductibles.

In some cases, the critics have said, the stop-loss deductibles might be lower than catastrophic major medical plan deductibles.

The working group said it will talk about the comments on the stop-loss paper draft in January. “Additional drafts will be exposed and calls will be scheduled as needed,” the working group says in a meeting summary report.

An excerpt from a health formula

5. The team working on new individual disability tables has excluded short-term worksite disability policies from a draft model regulation related to the tables.

The Health Actuarial Task Force heard a report from Doug Taylor and Bob Deal about a long-running effort to get new individual disability insurance tables into use. The working group handling the job has received 10 comment letters on a draft released in December 2013, the actuaries said.

One comment on the draft was that the market for ordinary individual disability policies is different from the market for individual short-term disability policies sold at the worksite, the actuaries said.

The actuaries agreed and revised the draft model regulation.

Some commenters said the underwriting margin required by the draft might be too high, but the drafters decided that provision is still appropriate and left it unchanged.