What You Need to Know
- HHS is the entity in charge of the new No Surprises Act compensation disclosure rules.
- Agents and brokers could comply by giving customers a commission schedule along with descriptions of other forms of compensation.
- Insurers would have to provide annual reports on payments to general agencies and marketing organizations, as well as on payments to agents and brokers.
A federal agency is setting up a big new compensation disclosure and reporting program for individual health insurance agents and brokers.
The Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services, says producers may have to start giving customers compensation descriptions, along with commission schedules, as early as Dec. 27.
CMS has drafted producer comp disclosure regulations to implement part of the No Surprises Act. The provision creating the act was part of the Consolidated Appropriations Act, 2021. Then-President Donald Trump signed the act into law Dec. 27.
The No Surprises Act
The best-known parts of the No Surprises Act will affect the medical bills of patients who go to the hospital for emergency care, or who go to hospitals in their health plan provider networks for ordinary care and end up getting care from out-of-network providers.
Other parts will require hospitals to disclose their prices and set rules for billing for air ambulance services.
A health insurance broker comp transparency section, described in Section 202 of Division BB of CAA 2021, requires compensation disclosures for all commercial health insurance intermediaries, including group health brokers, health benefits consultants and benefit plan administrators.
Indirect comp includes:
Payments by an issuer attributable indirectly to a policy, certificate, or contract of insurance to agents, brokers, and other persons for items other than sales and base commissions (for example, service fees, consulting fees, finders’ fees, profitability and persistency bonuses, awards, prizes, volume-based incentives, and non-monetary forms of compensation).