7 Facts About the New 2020 Federal Health Insurance Rules, for Agents

The Centers for Medicare and Medicaid Services (CMS) has finished setting the rules and numbers health insurers need to design the individual commercial major medical insurance policies for 2020.

One section of the new 2020 “benefit and payment parameters” regulation could affect agents, brokers and web brokers that break the rules.

(Related: The 2020 Draft Health Market Rules Are Here Now)

Here’s a look at some of what’s in the new, 401-page parameters PDF document.

1. 2020 Parameters Basics

CMS — an arm of the U.S. Department of Health and Human Services (HHS) — is in charge of enforcing Affordable Care Act (ACA) requirements and managing ACA programs.

One of the ACA programs that CMS managers is HealthCare.gov. HealthCare.gov runs web-based health insurance supermarkets for 38 states. The supermarkets sell coverage from commercial health insurers, such as Centene Corp., Molina Healthcare Inc. and, in some states, Blue Cross and Blue Shield carriers.

Twelve states and the District of Columbia run ACA exchange programs for their own residents. CMS is in charge of overseeing those locally run exchange programs as well as running HealthCare.gov.

The new final 2020 parameters document is much shorter than the 2019 parameters document, which took up 523 pages. That might be a sign that, overall, any changes in ACA commercial health insurance program rules will have a smaller effect in 2020 than the 2019 parameters changes have had this year.

2. Web Broker Enforcement Changes

CMS has put rules in the new parameters document that affect how HealthCare.gov web brokers display health plan database search results, and how it will punish producers and web broker entities that broke HealthCare.gov rules.

HealthCare.gov web brokers will not be able to base the order of plan search results on plan compensation levels.

A web broker can’t, for example, make plans from ABC Health Insurance Company show up before plans from XYZ Health Plans Inc. because ABC pays agent commissions and XYZ does not.

CMS officials have also approved rules that, in some situations, will let it terminate HealthCare.gov agents and brokers immediately, along with tougher enforcement rules for web broker entities.

The termination rules would apply to producers terminated “for cause if an agent or broker fails to maintain the appropriate state license in every state in which the agent or broker is actively assisting consumers with Exchange applications and QHP [qualified health plan] enrollment,” according to the regulations preamble.

The new, tougher web broker enforcement rules are necessary because of web brokers’ access to sensitive consumer data, officials say.

“We do not expect this authority will be used against the vast majority of web-brokers that make a good-faith effort to comply with applicable requirements,” officials say. “Further, we anticipate these provisions will have limited impact as they are designed to provide HHS greater flexibility to address the limited instances where there is evidence of significant misconduct or non-compliance by a web-broker, its officers, employees, contractors, or agents.”

The new rules could kick in if, for example, an agent or web broker that’s been blocked from doing business with HealthCare.gov tries to get around the ban by registering a new web broker business, officials say.

“Examples of the types of activities that could give rise to enforcement action under these new authorities are a web-broker’s officer instructing his agent/broker employees to falsify data submitted on consumers’ Exchange applications, a documented pattern by a web-broker entity of misusing Exchange consumer data, or the failure to adopt procedures to properly secure data and comply with applicable privacy and security requirements,” officials say.

If agents themselves are responsible for their own bad behavior, HealthCare.gov managers may simply punish the agents, but, if the web brokers are involved in non-compliance, “then we may also take action under this new authority against the web-broker (in addition to taking appropriate action for the agent or broker involved),” officials say.

3. Special Enrollment Periods (SEPs)

The ACA individual major medical “open enrollment period” system limits when people can buy health coverage without showing they have what the government classifies as a good reason to be shopping for insurance.

The idea is to protect health insurers’ ability to offer major medical insurance without medical underwriting, by encouraging healthy people to stay insured all the time, when they feel healthy. The open enrollment period system designers want to make healthy people aware that, if they fail to buy coverage when they feel healthy, and then they have high medical bills, they may be unable to get major medical insurance, or help with paying their medical bills, until the next open enrollment period.