Agents, Brokers And Navigators: Issues To Consider When Creating A .

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Agents, Brokers and Navigators:Issues to Consider When CreatingA State-Based Health InsuranceExchangeJessica Fulginiti WaltmanSVP, Government AffairsNational Association of Health UnderwritersFor theNCSL Task Force on Federal Heath Reform Implementation - 8/8/2011

The Starting PointPPACA requires every state to have an exchange as a health insurance purchasing optionfor individual consumers and small employers.Exchanges will be a purchasing portal for subsidized and unsubsidized qualified healthplans, as well as an enrollment point for Medicaid, CHIP and other state public healthassistance programs.PPACA requires every exchange to have a Navigator program to facilitate health planenrollment.Agents and brokers are specifically listed by the law as one of the groups that may beNavigators, but the law also stipulates a compensation/financing method that conflictswith traditional agent compensation structures.PPACA specifically provides for state health insurance exchanges to choose to utilize theservices of agents and brokers beyond the navigator program to help exchange customersboth with enrollment in qualified plans and also with the premium tax credits.Existing laws in every state provide for licensed health insurance producers to sell andservice all health plans offered in the state.

Issues to Address The use of agents and brokers in anexchange, both as navigators and/orthrough traditional means Funding of navigator program Compensation of agents and brokersand individuals performing navigatorfunctions Regulation of navigators, agents andbrokers

Navigator Duties Required byPPACA Conduct public education activities to raise awareness of theavailability of Qualified Health Plans; Distribute fair and impartial information concerning enrollment inQualified Health Plans, and the availability of premium tax creditsand cost-sharing reductions in accordance with federal tax laws; Facilitate enrollment in Qualified Health Plans; Provide referrals to any applicable office of health insuranceconsumer assistance or health insurance ombudsman, or anyother appropriate state agency or agencies, for any enrollee witha grievance, complaint, or question regarding their health plan,coverage, or a determination under such plan or coverage; Provide information in a manner that is culturally and linguisticallyappropriate to the needs of the population being served by theExchange.

Strengths of Navigators, Agents/BrokersNavigatorsPotentialOverlapAbility to provide outreachto special and underserved Public EducationpopulationsMarketing andadvertisingLanguage and/or culturalexpertiseDistributing fairand impartialFamiliarity with publicinformation aboutsector health programscoverage optionsFacilitatingenrollment inQualified HealthPlansProviding referralsto appropriatestate entities toaddress questions,grievances orcomplaintsAgents and BrokersFamiliarity with private health insurancemarkets and coverage optionsCoordination and integration of all benefits(LTC, disability, life insurance, dental, vision,Medicare products, financial services)Assistance with coverage issues (networks,authorizations, etc.)Assistance with claims issues throughout theplan year (resolving matters with providers,insurers, assisting with appeals)Assistance with policy renewals (plancomparisons, benefit utilization analysis,negotiation of appropriate benefits)Integration of cost-saving measures (wellnessprograms, disease management, planutilization)Assistance with detailed employer/employeeenrollment issues (verifications, participationrequirements, certifications etc.)Familiarity with state insurance regulators,laws, regulations and programsCompliance assistance (HIPAA, COBRA,ERISA, PPACA, Medicare Secondary Payer,plan testing, etc.)

Precedent for TraditionalAgent Involvement Utah Exchange Massachusetts Connector Existing State-Level PrivateHealth Insurance Exchanges Previous State-LevelPurchasing Pool Experiments State-Level High Risk Pools State-Level Subsidy Programs Long-Term Care Partnerships Federal Preexisting ConditionInsurance Plan

Financing of the NavigatorProgramFinancing Navigators– PPACA requires that states financetheir navigator programs usinggrants.– Additionally, a navigator may notreceive any direct or indirectcompensation from a healthinsurance issuer.– States may not use federalexchange grant funds to establishor pay for navigators.– The state Medicaid/CHIP programsmay claim a portion of thenavigator expenses, if thenavigator facilitates enrollment inthose programs.– An Exchange may charge aseparate fee to compensate thenavigatorQuestions to Raise Are navigators paid in lumpsump grants or on a per-headbasis?Are payments made toindividuals or entities?Are payments consistent acrossmarkets and/or products?Are accountability standards inany way tied to payments?Are exchange users charged anavigator fee?How do you segment exchangeoperating funds that may stemfrom a carrier?How do you prevent conflicts ofinterest?

Agent/Broker CompensationRestrictions on navigatorcompensation not comingdirectly or indirectly from acarrier is at odds with thetraditional independentproducer compensationmodel.Exchanges may be able toresolve that conflict byusing agents and brokersto assist exchangeconsumers outside of thenavigator program.Issues to consider Does producer compensationcome from the exchange orthe carriers? Consistency of compensationbetween markets to maintaina level playing field and avoidadverse selection PPACA requirement thatpremiums not vary based onwhether or not an agent isused for purchase Are exchange consumerscharged a producer feeoutside of the premium?

Licensure Issues To Address Will navigators be individuals or entities?– If entities, should that entity be appropriatelylicensed/regulated by the state? How will the state ensure legitimacy and accountability? Should entities be responsible for the conduct of theiremployees and/or volunteers? Or should these individualsbe held personally accountable/licensed as well? What liability will navigators have? How will potential complaints and/or grievances beaddressed? How should individual performing navigator functions beregulated and held accountable?– Producer Licensure?– Exchange-specific Certification?

What are the consumer protectionissues involved? Protection of Access to highlysensitive information– Financial information– Identifying information (SSNs)– Protected Health Information Fraud Prevention Protection against mistakes thatcould have severe financialconsequences for consumers

Existing Regulation of Agents andBrokers Agents and brokers have been regulated by stateinsurance departments for 100 years and arelegally accountable for their actions National Insurance Producers Registry (NIPR)isthe national database and means of trackingproducer activity in all states and territories To be in business agents/brokers must:– Comply with state licensing requirements (fees, background check,etc)– Pass licensing exam– Comply with CE requirements– Demonstrate financial responsibility– Maintain professional liability insurance– Maintain appointment standards with licensed insurers

Existing State Laws RegardingAgent/Broker Licensure State laws on producerlicensure are extremelyconsistent from state-tostate State-level licensinguniformity was mandated bythe Gramm-Leach-Bliley Actenacted in 1999 Existing state laws arebased on the NAIC ProducerLicensing Model adopted in2000

What triggers the need for aninsurance producer license in everystate? It’s not:– Where an individual works– An individual’s job title– How an individual is compensated It is:– the individual’s actions

“A person shall not sell, solicit ornegotiate insurance in this statefor any class or classes ofinsurance unless the person islicensed for that line of authorityin accordance with this Act.”NAIC Producer Licensing Model Act

“Sell” means to exchange a contract ofinsurance by any means, for moneyor its equivalent, on behalf of aninsurance company.NAIC Producer Licensing Model Act

“Solicit” means attempting to sellinsurance or asking or urging aperson to apply for a particular kindof insurance from a particularcompany.NAIC Producer Licensing Model Act

“Negotiate” means the act ofconferring directly with or offeringadvice directly to a purchaser orprospective purchaser of a particularcontract of insurance concerning anyof the substantive benefits, terms orconditions of the contract, providedthat the person engaged in that acteither sells insurance or obtainsinsurance from insurers forpurchasers.NAIC Producer Licensing Model Act

Exchange-Specific CertificationBeyond the issue ofproducer licensure, statesneed to consider whetheror not they want to requireadditional “exchangespecific certification” fornavigators, producersand/or other exchangepersonnel. This will be anew market with newrequirements, subsidies,programs, products, etc.and specific training maybe warranted.Issues to consider include: Precedent/existingstructural models includingthe Utah Exchange, statelevel subsidy programs,LTC partnerships, MedicareAdvantage How will it be structured,enforced, tracked? Will different typesentities/individuals receivedifferent training? Will accountabilitystandards be involved?

For More InformationJessica F. WaltmanSenior Vice President, Government AffairsNational Association of Health Underwriters2000 N. 14th Street, Suite 450Arlington, VA 22201(703) 276-3817jwaltman@nahu.org

Agents and brokers have been regulated by state insurance departments for 100 years and are legally accountable for their actions National Insurance Producers Registry (NIPR)is the national database and means of tracking producer activity in all states and territories To be in business agents/brokers must:

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