As part of its key reforms, the Affordable Care Act (ACA) allows each state to establish an insurance exchange (Exchange) to provide an online marketplace for individuals and small employers to purchase health insurance. According to the federal government, the Exchanges will help individuals and eligible employers compare and select qualified health plans (QHPs) that meet benefit design, consumer protection and other standards.
Coverage through the Exchanges will become effective on Jan. 1, 2014, with enrollment beginning on Oct. 1, 2013.
ACA directs the Department of Health and Human Services (HHS) to establish and operate a federally-facilitated Exchange (FFE) in any state that decides not to establish a state-based Exchange or will not have an operable Exchange for 2014. Alternatively, a state that does not establish its own Exchange may partner with HHS so that some FFE functions can be performed by the state.
For 2014, it appears that 17 states plus the District of Columbia will run their own Exchanges, 26 states will default to the FFE and seven states will partner with HHS with respect to the FFE.
HHS has established standards for brokers and agents that will facilitate enrollment under the FFE, including a registration process for producers that HHS expects to begin on or around July 1, 2013. This Legislative Brief summarizes the FFE requirements for brokers and agents.
Role of Brokers and Agents
ACA and its implementing regulations permit states to allow brokers and agents to enroll qualified individuals, small employers and employees in QHPs through an Exchange. Thus, all states—regardless of what type of Exchange is in operation—can determine whether to permit brokers and agents to enroll consumers in QHPs through the Exchange. Also, all states will continue to set standards for the broker and agent industry and to play their traditional role in licensing and overseeing insurance producers.
Where permitted by the state, brokers and agents (including web-brokers) may assist individuals and small employers with the Exchange’s eligibility application and enrollment processes, including plan selection. They may also help eligible individuals apply for ACA’s insurance affordability programs (that is, the advanced premium tax credit and cost-sharing reductions).
HHS issued final regulations to establish requirements for brokers and agents that enroll individuals or employers in QHPs or help individuals apply for advance payments of the premium tax credit and cost-sharing reductions for QHPs. The final regulations require the FFE and the broker or agent to have an agreement in place that, at a minimum, requires the producer to:
- Register with the FFE in advance of assisting individuals enroll in QHPs through the Exchange;
- Receive training in the range of QHP options and ACA’s affordability programs; and
- Comply with the FFE’s privacy and security standards.
In addition, a broker or agent must be licensed as a producer by the state and must comply with applicable state law related to producers, including laws related to compensation standards, confidentiality and conflicts of interest.
Implementation of Standards
According to HHS, it will work with brokers and agents, including web-brokers, to facilitate enrollment in the FFE, including a state partnership Exchange. HHS has provided preliminary guidance for brokers and agents regarding their involvement with the FFE, including the registration and training process and compliance monitoring.
Brokers and agents in all FFE states, including states with partnership Exchanges, will use the FFE broker and agent web portal. Brokers and agents must create an account in this web portal in order to interface with the FFE. This web portal will allow brokers and agents to complete Exchange registration and training and sign an agreement with the Exchange.
Registration and Training
HHS expects that broker and agent FFE registration and training will begin on or around July 1, 2013.
To register with the FFE, brokers and agents will be required to provide personal identifying information (for example, name, date of birth and email address) and professional information (for example, affiliated company name and national producer number). Producers must also identify which market (individual or small employer) they intend to serve under the FFE. Additionally, as part of the registration process, HHS must verify that the producer carries a valid state license to sell insurance, as required by state law.
HHS expects that FFE brokers and agents will be required to update their registrations annually to make sure they receive regular compliance and market updates.
After registering with the FFE, brokers and agents may access HHS’ online training program. To confirm each producer’s competency, brokers and agents will be required to complete applicable course modules in HHS’ training program. The training program’s content is grouped into the following four courses:
- FFE and ACA Basics (core course for all target audiences);
- Individual Market (for brokers, agents and web-brokers);
- Small Employer Market or SHOP Market (for brokers and agents only); and
- API Access to the Exchange (core course for application programming interface (API) users including web-brokers).
HHS provided the following sample exam question for the Exchange eligibility and enrollment module under the FFE and ACA Basics course:
A listing of brokers and agents who have successfully registered with the FFE will be made available on the Exchange website, so that consumers may identify a broker/agent to assist them with enrollment. This information will be available on an ongoing basis, and will include the name and contact information for the broker/agent. For the open enrollment period beginning on Oct. 1, 2013, the initial listing is expected to be available in or around:
- August 2013 for the individual Exchange; and
- September 2013 for the small employer Exchange.
Agreement with FFE
Upon completion of the registration and training requirements, brokers and agents will be required to electronically sign an agreement with the FFE.
According to HHS, it intends to monitor and oversee brokers and agents to confirm ongoing compliance with the terms of the agreement with the FFE. From time to time, brokers and agents may be asked to make their records available to HHS for oversight and compliance purposes. HHS anticipates that this monitoring and oversight will be limited to the terms of the agreement not covered by state law, such as the Exchange’s privacy and security requirements and standards for obtaining consumer consent.
If an agent or broker violates the terms of its agreement with the FFE, HHS may suspend or terminate the producer’s access to the Exchange. HHS intends to notify the state when a broker or agent’s Exchange access has been suspended or terminated. HHS also intends to refer any identified market conduct issues (for example, failure to act in the best interest of the consumer) to states for follow-up and remediation.
Additional information on the FFE requirements for brokers and agents, including required registration information and the FFE training curriculum, is available on the Centers for Medicare & Medicare Services (CMS) website.
Business Benefits Group will continue to monitor health care reform developments and will provide updated information as it becomes available.