On May 17, 2017, the Centers for Medicare and Medicaid Services released a guidance outlining a new “proxy direct enrollment pathway” that will be available for the 2018 individual market open enrollment period. The press release accompanying the guidance states that the new process “reduces needless regulatory burden for businesses that provide direct enrollment services and offers consumers easier access to healthcare comparisons and shopping experiences for coverage offered through HealthCare.gov.” The new direct enrollment process, however, also carries risks for consumers; these are acknowledged in the guidance but may not be adequately addressed.

Consumers currently have several options for enrolling in marketplace coverage through HealthCare.gov. Consumers can obviously enroll themselves using the HealthCare.gov website. Alternatively, a consumer can go to an agent or broker, who can walk the consumer through the enrollment process “side-by-side.” Finally, a consumer can enroll through an agent or broker, web-broker, or insurer using the current “direct enrollment” process. Under this process, the consumer initially goes to the web-broker or insurer’s website, is directed to HealthCare.gov to enter eligibility information and get an eligibility determination, and is then redirected to the web-broker or insurer’s website to enroll in coverage.

HHS has considered for some time creating an enhanced direct enrollment process through which the consumer could complete the entire HealthCare.gov enrollment process remaining on the web-broker or insurer’s website. This possibility was discussed in both the 2017 and 2018 payment rule preambles. In the preamble to the final 2018 payment rule, HHS noted that the enhanced direct enrollment process was still under development.

How The New Enrollment Process Will Work

The new proxy direct enrollment pathway, which will be available for 2018 enrollments, functions like the envisioned enhanced direct enrollment process but is apparently a temporary step toward the final development of that process. The process will only be available for the federally facilitated exchange and for state-based exchanges using HealthCare.gov. Individual consumers will have to create their own HealthCare.gov accounts to use the process. Proxy direct enrollment will only be available for simple cases and not for complex enrollments, special enrollments, or terminations; people in those situations will need to proceed through the current “double redirect” process.

The direct enrollment (DE) entity will have to check to determine if an existing application/enrollment is present for consumers and to use the current application or enrollment to help the consumer. Subject to these limits, however, applicants and enrollees using the new process will be able to complete the process of determination of marketplace, premium tax credit, and cost-sharing reduction payment eligibility, as well as qualified health plan (QHP) enrollment, on a DE entity’s websites.

Concerns For Consumers

Serious concerns have been raised about an enhanced direct enrollment process that are addressed at least in part by the guidance. One concern is the protection of very private personal and financial information that consumers will have to provide to DE entities for enrollment purposes. The guidance says that CMS “may release” future guidance on privacy and security requirements, and also that privacy and security issues will be a subject for the third-party compliance audits that DE entities must undergo. Another concern is that consumers receive necessary information on next steps they may have to take to establish eligibility, such as providing documentation where data matching issues arise or for special enrollment eligibility verification. Consumers must also to be informed of the tax liability implications of premium tax credit receipts and of their obligation to make a binder payment to effectuate enrollment. The guidance states that CMS “may require” DE entities to inform consumers as to these issues.

Yet another concern is that consumers be aware of the full range of products available through HealthCare.gov and not only informed of particular products. The guidance says that current web-broker display and QHP-listing requirements will be enforced. A final concern is that brokers not submit fraudulent applications, which is addressed at least in part by the requirement that consumers first establish their own accounts and the prohibition against bulk submissions.

Entities seeking to participate in the proxy direct enrollment process must retain third-party auditors to validate their compliance with requirements and undergo compliance audits and CMS testing and readiness review before they begin using the process. If more applications from DE entities are received than can be processed, CMS will process them on a first-come, first-served basis. CMS will suspend access to the FFE immediately if a DE entity is found out of compliance or if an entity attempts to use the proxy direct enrollment process without approval. Entities will be able to indicate their intention to use the proxy process after further guidance is released in mid-June.