The torrent of Affordable Care Act guidance that marked the end of April has continued into May, as the Centers for Medicare and Medicaid Services (CMS) released on May 1, 2013, a Health Insurance Marketplace Guidance on the role of agents, brokers, and web brokers in the health insurance marketplaces, formerly known—and still referred to here—as the exchanges.

Agents and brokers are the traditional channel through which most Americans and their employers have purchased health insurance coverage.  The ACA and implementing guidance offer new forms of assistance to help consumers enroll in insurance coverage, including navigators, in-person assisters, enrollment counselors, and the exchange itself with its call center and web portal.  Nevertheless, if the exchanges are to fulfill expectations by signing up millions of Americans for health insurance coverage, agents and brokers, including web-based brokers, will pay a vital role.  They will play a particularly important role in assisting small employers in signing up for the SHOP exchanges.  This guidance describes their role.

The guidance begins with a high-level discussion of the role of agents and brokers in the exchanges.  The ACA delegates to the states authority to decide whether or not to permit agents and brokers to play a role in enrolling individuals and employers in qualified health plans (QHPs) through the exchanges and helping individuals to sign up for premium tax credits and cost-sharing reduction payments.  The guidance expresses the willingness of CMS to work with agents and brokers in fulfilling these tasks where state law permits.

Two Pathways For Agents And Brokers To Assist Consumers

Agents and brokers will be able to assist consumers either through an insurer-based pathway, in which the agent or broker uses an insurer’s website to assist consumers, or directly through the exchange website.  Either way, information identifying the broker or agent will be provided to the insurer so that the insurer can compensate the agent or broker.

Agents and brokers who wish to enroll individuals through a federally facilitated or partnership exchange must register with the exchange, providing identifying information to the exchange, completing an online training course, and agreeing to comply with federal and state laws and regulations, including privacy and confidentiality laws.  Agents and brokers who complete this process will be given a unique identifying number, which, together with their national producer number (NPN), they can use to obtain compensation from insurers.  States will continue to license agents and brokers and may require additional state-specific training requirements, but the federally facilitated exchange will not include state-specific training requirements for 2014.

Insurer-based pathway.  An agent or broker appointed by an insurer can initiate enrollment of a consumer through the insurer’s website.   If the consumer wishes to enroll in coverage through an exchange, the agent or broker will be securely redirected to the exchange website to complete the eligibility determination process.  The agent or broker must use his or her unique identifier and NPN to access the exchange and must inform the consumer that the agent or broker will only provide information on QHPs with which he or she has a business relationship, but that the consumer may alternatively directly access the exchange website to see other plans.

Once an eligibility determination has been made, the agent and broker will return to the insurer’s website for plan selection and enrollment.  Although insurers apparently insisted on this pathway to enrollment, it would seem to defeat the purpose of the exchange, which was to facilitate consumer choice and competition among insurers.  States that operate their own exchanges can insist that brokers and agents display all available QHPs and to disclose their relationships—including compensation arrangements—with insurers.

Direct exchange pathway.  Alternatively, the agent or broker can help the consumer to enroll through an exchange website.  In this case, the individual, employer, or employee will obtain a user name or password through the exchange which will not be shared with third parties, including the agent or broker.  The agent or broker will then assist the consumer in securing an eligibility determination and in selecting a plan.  All QHPs available through the exchange will be displayed.  The agent or broker’s unique identifier and NPN will be entered as part of the transaction to indicate that the agent or broker assisted the consumer.  The guidance includes flow charts illustrating how these alternatives will work.

State-based exchanges may regulate compensation paid to brokers and agents, either by the exchange or by insurers.  Federally facilitated and partnership exchanges will neither pay nor regulate broker and agent compensation, other than to require insurers to pay the same compensation to brokers and agents who enroll consumers through the individual or SHOP exchanges that they pay for enrollment in similar plans outside the exchange.  The federal exchanges will provide information identifying agents and brokers to insurers to facilitate compensation.

Agents and brokers must work with all individuals and families who approach them for help, including those who are eligible for Medicaid or CHIP.  Agents and brokers must be familiar with these programs and must refer consumers eligible for these programs to the appropriate state agency.

Agents and brokers who assist employers in enrolling through the SHOP exchange are not required to obtain an exchange ID number.  They must enroll employers through the exchange pathway.

Agents and brokers may continue to communicate with consumers after enrollment through the exchange to the extent such communications comply with relevant laws, including in particular exchange privacy and security regulations which limit how such information can be used.  Agents and brokers who enroll employers through the SHOP exchange are expected to remain in contact with employers to provide customer services (such as enrolling employees).

Web Brokers

The guidance also addresses the role of web brokers.  Web brokers are potentially problematic because they resemble and may be seen as a substitute for the exchange website itself.  Research has shown, moreover, that the choice architecture of a web broker website may have a significant effect on consumer choice.  It may steer consumers towards a choice that is best for the web broker, but not necessarily for the consumer.

States exchanges must operate their own exchange website and make eligibility determinations, but may additionally allow web brokers to offer plan choice through their own websites.  To the extent permitted by state law, the federal exchanges will work with web brokers, allowing a consumer to begin shopping at a web broker’s website, be connected securely with the federal exchange website for an eligibility determination, and be redirected to the web broker website to select and enroll in a QHP.  The web broker will then transmit this choice back to the exchange, which will convey the enrollment information—including the identification of the web broker for compensation purposes—to the QHP insurer.  Web brokers will be required to comply with all exchange security and privacy requirements.

Unlike traditional brokers and agents, web brokers must display all QHPs, regardless of appointment or compensation arrangements.  If a consumer wishes to enroll in a plan for which the web broker does not have an appointment, the web broker must direct the consumer to the exchange website for enrollment.

Web brokers in the federal exchange may not use a sort order or sorting algorithm that will steer consumers to particular QHPs based on the web broker’s financial interest.  Web brokers may, however, offer additional tools or decision support that the consumer can use to navigate or refine the display of QHPs.  Web brokers must disclose to the consumer the source and nature of their compensation and must inform consumers that compensation arrangements do not affect the display of QHP options or the premiums charged. Web brokers may not charge consumers a separate transaction or service fee for using their websites.

Web brokers must display QHPs separately from non-QHPs and may not require consumers selecting a QHP to view advertisements for or information relating to other health insurance-related products, or sponsored links advertising health insurance-related products.  After a consumer has selected and enrolled in a QHP, the web broker may offer additional products and services in a section of its website separate from the QHP section.

A web-broker must offer consumers available quality information on each QHP offered in the exchange.  It must make information available to consumers with disabilities and limited English proficiency.  The web broker’s website must explain that it is distinct from the federal exchange website and that consumers may choose to use the federally facilitated exchange website at any time.