This week, the Department of Health and Human Services (HHS) released a much-anticipated statement and Q&A on the role of agents, brokers, and web-brokers in the health insurance Marketplaces.
According to HHS, individuals and small businesses who access health insurance coverage through their state Marketplace will be able to receive assistance in a variety of ways, including in-person, online, and phone support. The statement provides more information about how agents will register with the Marketplaces, assist consumers in applying for plans and receive commissions.
This statement relates mostly to the states defaulting to a federally-facilitated Marketplace (26 states at time of writing) or a state-federal partnership Marketplace (7 states). The 18 states planning for a state-based Marketplace are defining their own regulations and procedures. See a state-by-state guide to the Marketplaces.
Role of Agents in Health Insurance Marketplaces
According to HHS, agents and brokers (including web-brokers) will play a role in educating consumers about Marketplaces and insurance affordability programs, and will help consumers receive eligibility determinations, compare plans, and enroll in coverage. HHS anticipates that in addition to assisting individuals, agents and brokers will play a "critical role in helping qualified employers and employees enroll in coverage through the Small Business Health Options Programs (SHOPs)."
The release specified that agents and brokers intending to work with consumers in federally-facilitated and state-partnership Marketplaces will be able to enroll consumers in two ways:
Through an issuer’s website, or
Through the Marketplace's website.
Either way the registered agent’s or broker’s identifying information will be passed along to the appropriate issuer to facilitate the issuer’s payment to the agent or broker for each enrollment transaction.
Agent Registration with the Health Insurance Marketplace
According to HHS, for the federally-facilitated or partnership Marketplaces, all agents and brokers must register with CMS so that they may assist qualified individuals for individual Marketplace coverage.
CMS expects that an online registration process will begin in the summer of 2013, prior to open enrollment in October 2013. The registration process will require the agent or broker to:
Confirm identity by answering a number of simple questions online.
Complete a Marketplace-specific online training course.
Agree to comply with federal and state laws, rules, standards and policies, including those related to privacy and security policies, as a condition of working with consumers in the Marketplace.
Once registered, the agent or broker will receive a unique Marketplace user ID. This unique identifier, along with the agent’s or broker’s national producer number (NPN), will be used in issuing compensation from the issuer to the agent or broker.
Enrolling Consumers in the Health Insurance Marketplace via Issuers Website
According to HHS, many agents and brokers already use issuer websites to assist consumers, and will be able to continue using issuer websites to work with consumers in the federally-facilitated Marketplaces. This issuer-based "pathway" will be available to agents and brokers who are assisting individual consumers starting in the fall of 2013.
HHS says "An agent or broker initiates this pathway by logging on to the issuer’s website. Once the consumer determines that he or she would like to apply for coverage through the federally-facilitated Marketplace, the agent or broker will be securely redirected from the issuer’s agent website to the Marketplace website to complete the eligibility application, using his or her federally-facilitated Marketplace user ID to access the Marketplace website. The agent or broker will be prompted to enter his or her federally-facilitated Marketplace user ID and NPN as part of the eligibility application."
Enrolling Consumers in the Health Insurance Marketplace via Marketplace Website
According to HHS, using the Marketplace website, the consumer, employer, or employee will log directly into his or her own Marketplace account. The agent or broker may assist the consumer in creating his or her account if needed, but the consumer should choose their own username and password.
The agent or broker will work with the consumer to complete the eligibility application. The consumer will be prompted to enter the agent or broker’s Marketplace user ID and NPN on the application to indicate that the agent or broker assisted the consumer.
Commissions for Brokers in the Health Insurance Marketplaces
As part of the release, HHS provided several questions and answers about the role of brokers in the federally-faciliated, partnership and state-based marketplaces. Here is the response to the question about commissions, copied directly from the Q&A section:
Can a State-based Marketplace establish a commission schedule or pay commissions? How will Federally-facilitated Marketplaces, including State Partnership Marketplaces, address compensation?
"Nothing in the Exchange final rule prohibits a state from establishing laws, regulations and standards for issuer compensation of agents or brokers, including for enrolling individuals through that state’s Marketplace. Accordingly, State-based Marketplaces may establish parameters for compensating agents and brokers, by direct compensation from the Marketplace, or by having issuers pay commissions. If issuers will be paying commissions to agents or brokers, we encourage State-based Marketplaces to consider providing information to issuers to facilitate these transactions (e.g., by providing the agent or broker’s national producer number or state license number).
"Federally-facilitated Marketplaces, including State-Partnership Marketplaces, will not establish a commission schedule or pay commissions directly to agents or brokers. As is the case in the market today, we expect that the amount and terms of any commission would be negotiated by the issuer and the agent or broker. However, we note that HHS has established a QHP certification standard for issuers seeking certification in Federally-facilitated Marketplaces and Federally-facilitated SHOPs (FF-SHOPs) that would require QHP issuers to pay the same agent and broker compensation for enrollment through the Federally-facilitated Marketplaces and FF-SHOPs and for enrollment in similar health plans offered outside the Federally-facilitated Marketplaces and FF-SHOPs.
"CMS will re-evaluate this approach in the future. As described in Section I of this document, Federally-facilitated Marketplaces and State Partnership Marketplaces will transmit agent and broker identifying information to issuers to facilitate payment."
Click here to read the full HHS release, inlcuding a complete list of Q&As and additional information for web-based brokers. What the release doesn't address yet is the exact registration and training details. These details are expected later this summer.
Role of Brokers in the Health Insurance Marketplaces - Flow Chart
Did this release answer your questions about the role of brokers and agents in the marketplaces? What questions do you still have? Let us know in the comments below.