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State Insurance Regulators Mull Roles of Agents, Educators in Exchanges

By Jane Norman, CQ HealthBeat Associate Editor

May 19, 2011 -- State insurance commissioners are treading carefully as they work to define the roles of those who sell health policies and the people who will educate consumers about insurance when the health care law goes into effect.

A subgroup of the National Association of Insurance Commissioners (NAIC) approved a draft "white paper" that tries to spell out some of those definitions in an effort to help state legislators create their health benefits exchanges.

But it's a tricky task for the state regulators, and one that's already provoking disputes among state lawmakers working on legislation creating their exchanges.

In a discussion during a conference call and in comments submitted for the paper, it's clear insurance brokers and agents remain deeply worried about intrusions on their traditional turf when individuals and small businesses start buying their insurance through the new state exchanges in 2014.

The exchanges represent a potential vast new market of millions of customers who will get coverage under the law. And brokers already have suffered one defeat when it comes to preserving their livelihoods, under a separate HHS regulation on medical payouts created by the law.

The insurance salespeople want the educators—or "navigators," in the parlance of the health care law—to be subject to state regulations, licensing and oversight, says a comment letter to NAIC from the Independent Insurance Agents and Brokers of America.

Any person, whether a traditional salesperson or a navigator, should have to get an insurance producer license to order, sell, solicit or negotiate insurance, offer advice, or enroll people or businesses in plans, they say.

The advocacy group Families USA, though, says in a paper analyzing the issues that navigators will need training different from that of producers, and "today's licensure requirements for brokers or agents are not the appropriate vehicle to ensure navigators' competency."

As for NAIC, it appears to be sure that it wants to preserve the role of those who sell insurance, or producers, as they are known in state law. "Producers Will Play a Crucial Role in the Success or Failure of an Exchange," says one heading in the white paper.

"Producers have a significant relationship of trust with the individuals covered by both the individual market and the small employer insurance market," the paper says. Those producers who understand the exchanges and how they work can increase public awareness of the exchanges and step up traffic to them, the paper adds.

The NAIC white paper now will be forwarded on to a larger NAIC committee, where it's expected to undergo some revisions again, and eventually will go to the full membership for approval. Regulators also are awaiting HHS regulations on navigators and other exchange details. The regulations are expected in June or July.

Maryland Insurance Commissioner Beth Sammis suggested during the NAIC conference call that the white paper be clarified so that it describes the navigators and the producers as having complementary roles, rather than an "either-or" description.

And Kansas Insurance Commissioner Sandy Praeger said that she envisions the navigators as similar to states' Senior Health Insurance Information Programs, which use trained volunteers to help seniors understand their Medicare health insurance choices.

The health care law (PL 111-148, PL 111-152) specifies that each exchange must award grants to navigators whose duties will include conducting public education activities, distributing "fair and impartial" information on enrollment in health plans, "facilitat[ing]" enrollment into plans and providing referrals for consumers with complaints.

Navigators may include trade, industry or professional groups; unions; chambers of commerce; licensed insurance agents; or other groups, as long as they provide fair and impartial information, the white paper says.

But navigators can't be health insurers, and they can't receive compensation directly or indirectly from insurance companies in connection with enrolling consumers in plans.

Producers, on the other hand, have long been defined and regulated in state law and generally include individuals or health insurers who sell, solicit or negotiate contracts, and the term is used in many states to define both agents and brokers, says the white paper.

The white paper says that the health care law doesn't really distinguish the roles of producers and navigators, and states will need to evaluate how each group should be regulated.

NAIC says the issues include:

  • How will the HHS regulations on exchanges affect the oversight and roles of producers and navigators?
  • Should states license or certify navigators?
  • Who will establish the educational and continuing education for navigators?
  • How will navigators be held accountable for errors?
  • Are navigators expected to help people enroll in public programs like Medicaid?
  • What funding sources will exchanges use for navigator programs?

The NAIC is still expected to take up separate white papers on exchange issues including governance, financing and adverse selection.

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