Proposed ACA regulations are a win for brokers, consumers

Proposed federal regulations to crack down on fraud and misrepresentation in the Affordable Care Act marketplace will be published Wednesday.

The Centers for Medicare & Medicaid Services said the proposed regulations will strengthen program oversight and integrity, promote competition, and reduce unnecessary costs in the federal and state-based health insurance exchanges.

The proposed regulations would crack down on fraud and misleading practices by agents and brokers, restore accountability for taxpayer-funded subsidies, and remove federal barriers that have limited plan innovation and driven up premiums.

The CMS proposal “is the most radical shift in ACA regulations since the original ACA regulations were drafted,” and is “a net positive” for agents and brokers who work in the ACA space, said Sam Melamed, CEO at NCD and an expert in the ACA market.

“ACA agents have gotten a bad name over the last few years because of some of the scammers and fraudsters and bad practices, and this is the first really serious effort to clean that up,” he told InsuranceNewsNet.

In addition, the proposed regulations would certify some non-network health plans as qualified health plans under the ACA, would verify consumer eligibility for ACA enrollment and would improve access to coverage.

CMS wants to allow insurers to offer catastrophic coverage in one-year terms or in longer terms of consecutive years, up to 10. The agency also proposes to rethink hardship exemptions for certain individuals over age 30, allowing more people to choose a catastrophic plan if they want to.

The proposed rule further aims to expand affordable options by allowing for plans that include lower deductibles but higher out-of-pocket maximums.

“This will enhance flexibility for issuers to innovate in plan design, permit issuers to choose whether to discontinue existing standardized plan options and the chronic and high-cost condition plans originally offered through the non-standardized plan exceptions process altogether, or continue offering them with either the same or modified cost sharing,” Melamed said.

The proposed changes to the ACA regulations mean agents and brokers will need to educate themselves to help consumers choose the best plan amid a variety of options, he said.

“The ability to play around with out-of-pocket maximums and predeductible benefits for catastrophic plans mean that an agent and broker who wants to represent the best options in this market must do a lot more work on educating themselves. It's no longer enough to understand bronze, silver, gold and platinum plans. There will be a new vista of opportunity for indemnity style plans, or non-network style plans with reference-based pricing. So there will be more opportunity for agents to earn a commission and help their clients with ACA-type coverage, now that there will be more types of ACA type-coverage, but it also will come with a corresponding requirement to spend more time studying the market.”

Key provisions include:

• Requiring agents and brokers to use a Department of Health and Human Services-approved and created consumer consent form to meet the eligibility application review requirements and consumer consent documentation requirements. This proposal would protect consumers enrolling on the exchanges from noncompliant agents, brokers and web-brokers. It also would protect consumers from inaccurate eligibility determinations, being enrolled in health coverage that does not meet their needs, and unexpected tax liabilities.
• Establishing more robust standards of conduct related to the marketing practices of agents and brokers which would include examples of prohibited marketing practices. This proposal includes examples of prohibited marketing practices, such as providing cash, monetary rebates, or cash equivalents to induce consumers to enroll; falsely asserting or suggesting that consumers will qualify for zero-dollar insurance or zero-dollar premiums; and miscommunicating enrollment timelines and deadlines.
• Discontinuing the vendor program, which allows HHS-approved vendors to provide the annual marketplace agent and broker training.
• Allowing non-network plans to receive QHP certification beginning with plan year 2027 by demonstrating a sufficient choice of providers. Non-network plans would be required to ensure access to a range of providers that accept the non-network plan’s benefit amount as payment in full.

CMS said this policy aims to reduce overall health care costs by empowering enrollees to use price transparency information to shop for lower prices and negotiate directly with providers, thus fostering increased competition. In addition, the proposal would eliminate the administrative overhead associated with traditional network management, potentially resulting in lower premiums.

• Re-introduce the pre-enrollment special enrollment period verification requirement for federal exchanges. CMS said this would reduce instances of improper enrollments, which can lead to a more balanced risk pool and potentially lower premiums.
• Permit health plan issuers to choose whether to discontinue existing standardized plan options and the chronic and high-cost condition plans originally offered through the non-standardized plan exceptions process altogether or continue offering them with either the same or modified cost sharing. These proposed policies would reduce issuer and HHS burden and regulatory complexity and enhance flexibility for issuers to innovate in plan design.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].