The Department of Health and Human Services (HHS) recently issued a final rule providing states with considerable flexibility in the organization and operation of state-based health exchanges pursuant to the Patient Protection and Affordable Care Act (PPACA).
The new Exchange rule also acknowledges the important role of Brokers going forward, as highlighted in a recent Legislative Alert published by BenefitMall. The regulations are detailed in 166 pages of guidance that outline how a state can organize an Exchange, including how to create a SHOP Exchange for small business employees.
Many elements of the Exchange rule will impact the way Brokers service their clients. At the forefront is the fact that HHS has acknowledged the pivotal role Brokers assume in the provision of health insurance benefits – an acknowledgment that has been long coming. Clearly, the Broker community has turned a corner in terms of HHS’ view of Brokers in health care reform efforts going forward.
In Section II, Provisions of the Proposed Regulation and Analysis and Responses to Public Comments, HHS acknowledges the “significant” role of Brokers in its “comment” and “response” discussion:
: We received a number of comments stating that HHS should limit the number of consultations with health insurance issuers, agents, and brokers described in proposed § 155.130(j) and (k) to minimize any potential conflicts of interest. One commenter recommended that consultation with a health insurance issuer be made fully transparent, while several other commenters recommended that the consultation only include agents and brokers that enroll qualified individuals, employers, or employees.
Response: We understand the concerns of commenters, but also acknowledge that health insurance issuers and agents and brokers are likely to play a significant role in the Exchange.* We encourage Exchanges to be transparent in the consultation process. Furthermore, in States where the Exchange is not housed in the department of insurance, we expect there to be regular consultation between the Exchange and the department of insurance, given the need for coordination between the two entities.
*Emphasis added by BenefitMall. Federal Register, Volume 77, Number 59 page 18321.
Of paramount interest is the rule’s codification of section 1312(e) of the Affordable Care Act. Section 155.220(a)(3), issued as an interim provision that is still open to commentary from the public, provides states with many choices that will directly impact the relationship of brokers to Exchanges. The Exchange rule:
- Provides the option to allow Brokers to enroll individuals and employers in qualified health plans (QHP);
- Allows Exchanges to display information about Brokers on its Exchange website and in other materials made available to the public;
- Authorizes Brokers to provide assistance to qualified individuals applying for federal premium subsidies; and
- Allows Brokers to assist individuals in applying for advance payments of the premium tax credit and federal premium subsidies.
Federal Register Volume 77, Number 59 pages 18334, 18443.
The Exchange rule allows state-based health Exchanges to use the market presence of Brokers, including web-based Brokers such as BenefitMall, that are licensed by the state to assist consumers in enrolling in QHPs in a state Exchange. We will now need to work with each state going forward to ensure the role of Brokers is optimized as each Exchange is developed and implemented.
We will continue to endeavor to keep you up-to-date on these and other developments in our ever- evolving marketplace. Please visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources, or you may visit www.BenefitMall.com to view past Legislative Alerts.
The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.