News from the Feds

By Claudine Swartz
Day Health Strategies

May 2013 – The federal government continues to issue regulations and guidance to ensure that many Affordable Care Act (ACA) provisions “go live” in 2014. The focus has been two issues critical to MBPA members: 

• The role of agents in the health care marketplace; and
• How navigators will help small businesses and individuals access health coverage.  

Here’s what’s happening:

An agent’s role in the new federal health marketplace:
On May 1, 2013, the Centers for Medicare and Medicaid Services (CMS) released a document called “Health Insurance Marketplace Guidance” to further describe the role of agents and web brokers in the federal health insurance marketplace.  Generally, this guidance describes two pathways that agents may use to assist individuals and small employers with initial enrollment and changes throughout the year:  

Via the federal health insurance marketplace website: Here, the agent works with consumers to complete eligibility, compare health plans on the marketplace website and submit the consumer’s selection.  Agents who enroll employers through the federal small business marketplace are expected to remain in contact with employers to provide customer services (such as enrolling employees).

Via an insurer: Here the agent uses a carrier’s website to assist individuals; this option is not available for enrolling small businesses. Insurance carriers appoint agents to work on their behalf. Interestingly, the agent need only provide qualified health plan information for carriers that they have a business relationship with, after disclosing that consumers can access additional plan information via the federal health insurance marketplace website.

While states will continue to license agents, the feds require agents assisting individuals to register with CMS and receive training.  However, agents who assist small employers in enrolling through the federal small business exchange are not required to register with CMS or complete training. Regarding compensation, the federal marketplace will not pay commissions to agents; it is expected that these fees will be negotiated between agents and insurers.

With regard to web brokers, the federal exchange will work with web brokers to the extent that individual sates permit this. Essentially, consumers could then start shopping on a web broker site, go to the federal marketplace for eligibility screening, and then go back to the web broker site to choose and enroll in a plan. Web brokers must display all QHP options, rather than only one issuer.

Employers and minimum health coverage
You’ll recall that a penalty materializes when a large employer does not offer minimum affordable health coverage and an employee accesses a premium tax credit through the exchange.  To date, the feds have defined minimum coverage as covering 60 percent of total benefit costs provided under the plan; a May 3 proposed regulation dives deeper to ensure employers know when they are in compliance.

There are several ways ways an employer can validate that their plan offers minimum value:
 

• For a small group plan, employers can ensure minimum value by purchasing a bronze level plan.
• Employers may use the HHS minimum value calculator.
• For a non-standard plan, employer may have an actuary who is a member of the American Academy of Actuaries certify the plan.
• Employers may use one of three safe harbors to ensure minimum value: 1) A plan with a $3,500 integrated medical and drug deductible, 80 percent cost-sharing, and a $5,000 maximum out-of-pocket limit; 2) A plan with a $4,500 integrated medical and drug deductible, 70 percent cost sharing, a $6,400 maximum out-of-pocket limit, and a $500 employer contribution to an HSA; or 3) A plan with a $3,500 medical deductible, $0 drug deductible, 60 percent medical cost sharing, a $10/$20/$50 copay tiered drug plan, and a 75 percent coinsurance for specialty drugs.

Keep in mind this proposal is not final. MBPA will update you on any changes in the final regulation.

An opportunity to help consumers navigate the new marketplace:
The federal government announced that $54 million is available to fund navigator programs for 33 states using the federal exchange; additionally proposed regulatory guidance on navigators was issued. This announcement received considerable heat, with many wondering if the funding is sufficient to bring consumers up to speed before open enrollment begins this October. In Michigan, $1.9 million is available; this funding calculation is based on the state’s uninsured count. To access funding, potential navigators must file applications by June 7; awards will be made on August 15. Click here for the application.

Navigator responsibilities are defined in the ACA. Navigators are required to:

• Conduct public education activities to raise awareness of the availability of qualified health plans;
• Distribute fair and impartial information concerning enrollment in qualified health plans and the availability of premium tax credits;
• Facilitate enrollment in qualified health plans;
• Provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman other appropriate State agency or agencies, for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a determination under such plan or coverage; and
• Provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served.

All navigators must demonstrate existing relationships or the ability to quickly establish relationships with individuals and small businesses that need assistance enrolling in QHPs. Eligible navigators include:
 

• Licensed agents and brokers;
• Trade, industry, and professional associations;
• Commercial fishing industry, ranching, and farming organizations;
• Community and consumer-focused nonprofit groups;
• Chambers of commerce and Small Business Administration partners;
• Unions; and
• Others.

The following are ineligible to become navigators:
 

• Health insurance issuer
• Anyone receiving compensation directly or indirectly from an insurance issuer
• Entities receiving any consideration from health plan (i.e., cannot receive payment for enrolling in QHP)
• Entities with relationships to issuers of stop loss insurance, including those who are compensated directly or indirectly by issuers of stop loss insurance in connection with enrollment in QHP or non-QHPs

Each state will have a minimum of two navigators, one of which must be a community based nonprofit organization. Navigators may choose to concentrate only on assisting individuals or small businesses; however, navigators cannot also sell qualified health plans.

The regulation requires Navigators to have expertise in eligibility and enrollment rules and the needs of underserved and vulnerable populations, including the ability to provide culturally competency.  Navigators must complete 30 hours of an HHS-developed training program and pass an exam.

Stakeholder engagement & public hearings
The feds increasingly invest resources to ensure that the public and key stakeholders understand the health policies that go into effect January 1, 2014. First, the feds held stakeholder engagement conference calls with all states using the federal exchange, including Michigan.

Second, a public hearing was held in Washington to discuss the calculation of penalties for large employers subject to this fine. We expect final regulations to be issued after the feds incorporate feedback received in late April.

Employer reporting guidance
Employers are required to report key information to employees about health reform implementation. The Department of Labor released guidance on May 8 to facilitate communication. The agency also issued a model employee notice for employers who intend to offer insurance and employers who will not offer insurance. Employees must be notified by October 1.

Employers are required to communicate the following:

•    Employees have the option to purchase insurance via the new health care marketplace and may be eligible for premium subsidies.

•    Employees risk losing the employer contribution to health care benefits if they purchase insurance via the marketplace.

•    If employee coverage is offered, confirmation that the plan meets a minimum standard.   

Claudine Swartz is a Senior Consultant at Day Health Strategies. She is a health care policy and government affairs consultant with nearly 20 years of experience. Swartz has worked throughout the health care industry, helping providers, payers, and stakeholders understand and influence complicated health care policies and develop related business strategies. She has worked directly for the University of California Health System, the National Association of Public Hospitals, and Delta Dental of Massachusetts.