Health Insurance Exchanges: Health Insurance “Navigators” and In-Person Assistance
Released: 2014-08-13T00:00:00

Introduction

The 2010 Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) mandated the creation of state health care exchanges for the sale of insurance policies, including certain individual and small-group policies. Under the ACA, a state may set up its own exchange or create an exchange in partnership with the federal government. If a state chooses not to form an exchange, or cannot meet ACA requirements, the Department of Health and Human Services (HHS) will run its exchange. (See text box below, "Glossary of ACA Terms.")

As of July 2014, 14 states and the District of Columbia had secured HHS approval to create their own exchanges, 7 to enter into partnership exchanges, 29 to have federally facilitated exchanges, and 2 to have state-based SHOP/federally facilitated individual exchanges. The exchanges began offering insurance on October 1, 2013. The insurance policies, and the exchanges, were fully operational on January 1, 2014.

An exchange is not an insurer, but is rather a type of marketplace where private insurance companies may sell qualified health plans (QHP) that meet certain federal standards. Consumers, businesses, and issuers are not required to use the exchanges to purchase insurance. However, individuals must buy exchange-based coverage to qualify for federal premium tax credits and cost-sharing subsidies. Small businesses that apply for coverage through the exchanges may be eligible for small business tax credits. Consumers may apply for coverage over the phone, online, via mail, or in person in some areas.

The Congressional Budget Office (CBO) projects that 25 million individuals will be enrolled in health insurance through the exchanges in 2024. New enrollees are expected to be poorer, more racially and ethnically diverse, less educated, and less familiar with insurance than those who currently have health insurance coverage. To help these consumers negotiate the enrollment process, the ACA requires exchanges to perform education and outreach functions. Exchanges may use a variety of techniques to reach out to the public including mailings, brochures, social media, corporate partnerships, health fairs, and other public events.

Consumer Assistance Programs

Under the ACA and implementing regulations issued by the HHS Centers for Medicare & Medicaid Services (CMS), consumer assistance outreach programs include the following:

Mandatory navigator programs designed to provide "fair and impartial" information about exchange-based insurance plans, as well as the availability of federal assistance to help defray the cost of insurance and other health programs. Non-navigator or "in-person assistance" programs at state-run exchanges and state partnership exchanges. The non-navigators perform generally the same functions as navigators, or complement the role of navigators by reaching out to underserved populations, but have a separate source of federal funding via exchange establishment grants. Non-navigators are optional at state exchanges, and mandatory at certain partnership exchanges. Certified application counselors to help individuals apply for QHP enrollment and possible subsidies. Exchanges may designate various organizations or individuals as application counselors or allow outside organizations to certify the counselors. Counselors are mandatory, but their duties are more limited than those of navigators and non-navigators. No new ACA funds were provided for the counselors, though they may be funded through existing state, local, or federal programs.

In addition, consumers and businesses may use insurance brokers and agents, including web-based brokers (where allowed by states), to purchase QHPs. Brokers and agents, licensed by states, are generally paid a commission by insurance companies for selling their policies. Brokers and agents may apply to serve as navigators, but may not accept direct or indirect compensation from health or stop-loss insurers in this role.

Under CMS rules, consumers may also go directly to insurance companies to obtain information about QHPs and other insurance options, and to sign up for such plans.

Some lawmakers, as well as brokers and agents, have questioned whether CMS regulations impose sufficient training and consumer safeguards for the navigator, non-navigator, and consumer assistance programs. A number of states have passed legislation to require navigators to have additional training and licensing, or to undergo background checks. The ACA gives states flexibility to certify or license navigators, but state actions may not prevent the implementation of Title I of the ACA, which authorizes the exchanges. CMS has interpreted the law to mean that states may not require all navigators, for example, to be licensed as insurance agents or brokers. (See " State and Exchange Licensing and Certification .") This report outlines federal and state oversight of navigators, the role of brokers and agents, and previous education and outreach efforts for federal health care programs.

Navigator Program

The navigator program is described in Section 1311(i) of the ACA. Exchanges are required to have navigators who will perform duties that include

conducting public education activities to raise awareness of the availability of QHPs; distributing fair and impartial information concerning enrollment in QHPs, and the availability of premium tax credits and cost-sharing assistance; facilitating enrollment in QHPs; referring any enrollee with a grievance, complaint, or question regarding a health plan to an applicable office of health insurance consumer assistance, a health insurance ombudsman, or any other appropriate state agency or agencies; and providing information that is culturally and linguistically appropriate to the population being served by the exchange.

The ACA directed the Secretary of HHS (Secretary) to establish standards for the navigator program, in collaboration with states. The Secretary is to ensure that navigators are qualified and licensed, if appropriate, and to set standards to avoid conflicts of interest in the program.

CMS regulations to implement the ACA specify that navigators may offer consumers assistance in comparing and analyzing insurance options, but may not tell applicants which health plan to select. In addition, exchanges, rather than navigators, formally determine whether an applicant is eligible for tax credits and other assistance to defray the cost of health coverage. Exchanges also formally enroll applicants into QHPs, with some exceptions.

Eligibility to Become a Navigator

The ACA includes a list of organizations and individuals eligible to become navigators, including trade, industry, and professional associations; commercial fishing industry organizations; ranching and farming organizations; community and consumer-focused non-profit groups; chambers of commerce; unions; small business development centers; and licensed insurance agents and brokers. The list is illustrative rather than definitive, and other organizations may apply for navigator status. At least one navigator for each exchange must be from a community, non-profit organization.

Under the ACA, a navigator may not be a health insurer or receive direct or indirect consideration from a health insurer in connection with enrolling individuals or employees in QHPs or non-QHPs. CMS regulations further bar individuals or organizations from serving as navigators if they are issuers of stop loss insurance and their subsidiaries; associations that include members of or that lobby for the insurance industry; or entities that receive direct or indirect consideration from a health insurance or stop loss insurance issuer in connection with enrolling individuals or workers in a QHP or non-QHP. Stop loss insurance is a type of insurance that takes effect after a company or issuer has paid out a certain level of health care claims. Entities that self-insure (finance their own health insurance plans) often use stop-loss coverage to limit their expenses.

Insurance brokers and agents may apply to become navigators, but under CMS rules they may not accept compensation from health or stop loss insurers in this role. (See " Brokers and Agents .") However, a health care provider is not barred from becoming a navigator solely because it receives payment from a health insurance issuer for providing services.

In instances when a state operates a SHOP exchange, but that state's individual exchange is run by the federal government, CMS will allow two separate navigator programs. Such states will have a federal navigator program for the individual exchange, and a state navigator program for the SHOP. SHOP navigators could fulfill their obligation to facilitate enrollment, and refer consumers with complaints or questions to applicable government offices, by referring small businesses to agents and brokers for this type of assistance, so long as applicable state law permits agents and brokers to carry out these functions.

Navigators must maintain a physical presence in their exchange service area. Navigators working for federally facilitated exchanges are not required to have their principal place of business in the exchange service area, however.

Navigator Application Process

CMS in April 2013 released its initial cooperative agreement funding application for individuals and organizations seeking to become navigators at federally facilitated and partnership exchanges. On August 15, 2013, CMS awarded $67 million in 12-month grants to 105 navigator organizations. The grants expire in August 2014. (See " Navigator and Non-navigator Funding .") In June 2014, CMS released a funding application for $60 million in new 12-month grants for navigators in federally facilitated and state partnership exchanges. The grants are to be awarded, and take effect, in September 2014.

Organizations and individuals that apply for the navigator program are required to submit certain information to CMS, including

a plan for carrying out outreach and education activities specified in the ACA and in CMS regulations; a description of existing relationships with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be eligible to enroll in a qualified health plan; or a description of how such relationships could be readily established; a statement attesting that the applicant is not ineligible for the program due to a financial or other relationship with health insurers; a plan to perform the statutory and regulatory duties of a navigator for the entire length of the agreement; an attestation that staff and volunteers will remain free of conflicts of interest while acting as a navigator; a plan to ensure that staff and volunteers complete all required training; and a plan to comply with data privacy and security standards.

Navigator applications are evaluated on criteria that include the scope of their planned activities; their planned budget; their background and experience; and their expertise in health issues, outreach, and working with underserved and vulnerable populations. Navigators must provide weekly, monthly, quarterly and final reports on their work, and comply with CMS evaluations. While navigator organizations are not required to perform background checks on their staff, navigator applications that do have a plan for background checks may receive a higher score on their grant application.

Non-navigator/Assister Programs

CMS allows, but does not require, state-based exchanges to establish non-navigator or assister programs that perform the same basic functions as navigators. States that have entered into consumer partnership exchanges are required as a condition of the partnership to create non-navigator programs, in addition to their navigator programs. State-based exchanges, and states in consumer partnership exchanges, may use ACA Section 1311 exchange establishment grants for non-navigator programs during their first year of operation. The ACA prohibits exchanges from using Section 1311 exchange establishment grants for regular navigator programs, with some limited exceptions.

CMS created the non-navigator program to address the possibility that some exchanges might not have sufficient money for education and outreach during their early months of operation. State-based exchanges can use non-navigators to fill in any gaps in their navigator programs, and provide a full range of services during their first year. Possible funding for following years is not clear. The ACA requires that each exchange be self-sustaining, beginning January 1, 2015. The ACA provides that an exchange may charge an assessment or user fee to participating issuers, but also allows an exchange to find other ways to generate funds to sustain its operations, which include continuing education and outreach activities.

Like navigators, non-navigators may not be issuers of health insurance and their subsidiaries, including stop-loss insurance; associations that include members of or that lobby for the insurance industry; or entities that receive direct or indirect consideration from a health insurance or stop-loss insurance issuer in connection with enrolling individuals or workers in a QHP or non-QHP. Non-navigator programs at consumer partnership exchanges, and state-based exchanges funded through ACA exchange grants, are subject to the same training and conflict-of-interest restrictions as navigators. State-based exchanges that create non-navigator programs with their own money, rather than with exchange establishment funds, are encouraged, but not required, to use CMS navigator standards. Non-navigators in federally funded exchanges and state exchanges must maintain a physical presence in the exchange areas. Non-navigators in federally funded exchanges do not have to have their principal place of business in the exchange area.

State-run exchanges have some flexibility in defining the roles of in-person assistance or non-navigator personnel and determining how their duties mesh with those of the navigators. For example, states can require non-navigators to target different demographic groups or perform different functions than navigators.

Certified Application Counselors

CMS regulations require state exchanges to have certified application counselor programs to help facilitate enrollment in QHPs. There is no new federal funding for the counselors, though state-based exchanges may use Section 1311 establishment funds for counselor training. Exchanges are not prohibited from using existing private, state, or federal programs to fund the counselors.

Federally facilitated exchanges may designate organizations to certify their staff or volunteers to perform as certified application counselors. Exchanges must focus on organizations that already have systems in place for protecting personally sensitive data, such as state Medicaid and CHIP agencies, hospitals and other health care providers, or social service agencies. State-based marketplaces may designate outside organizations to certify staff and volunteers as application counselors, or may directly certify application counselors.

Like navigators and non-navigators, certified application counselors are to provide information regarding the full range of QHPs offered at an exchange and health insurance affordability programs. The counselors must work "in the best interest" of enrollees when helping individuals and employees apply for QHPs and other coverage. Counselors must go through exchange-approved training and comply with data security and privacy standards and applicable state and federal laws. They may work through an exchange or navigators and non-navigators to provide appropriate services to people with disabilities or to address complaints, grievances, and other questions. Certified application counselors must be recertified on at least an annual basis and must meet any licensing, certification, or other standards set by a state or exchange, so long as the standards do not prevent the implementation of the ACA.

Certified application counselors may not receive consideration directly or indirectly from any health insurance issuer or issuer of stop-loss insurance in connection with the enrollment of any individual in a QHP or a non-QHP. Health providers or other entities may not be disqualified from becoming certified application counselors solely because they receive payment from a health insurer for providing health care services. Certified application counselors do not have to maintain a physical place of business in the exchange area, and counselors working for a federally funded exchange do not have to have their principal place of business in the exchange area.

Federally Qualified Health Centers

CMS in 2013 provided $150 million in grants to more than 1,100 community health centers, which may serve as application counselors, to help enroll consumers in QHPs. CMS provided an additional $58 million to the health centers in December 2013 to help during final enrollment.

Conflict-of-Interest Rules

Navigators and non-navigators funded through Section 1311 exchange establishment funding must attest that they are eligible entities and submit a written plan to remain free of conflicts while serving in these roles.

CMS regulations (45 C.F.R. 155.215) state that certain business arrangements or relationships are not necessarily a bar to serving as a navigator or a non-navigator, so long as they do not prevent an entity from providing information and services in a fair, accurate, and impartial manner. To mitigate possible conflicts of interest, CMS requires covered navigators and non-navigators to reveal certain information regarding possible conflicts of interest to exchanges and consumers.

Additional information to be disclosed includes background about

any lines of insurance, other than health care or stop loss coverage, that a navigator intends to sell while serving as a navigator; any existing and former employment relationship during the past five years with an issuer of health or stop-loss insurance or a subsidiary; any existing employment relationship between any issuer of health care or stop loss insurance and an individual's spouse or domestic partner; and any existing or anticipated financial, business, or contractual relationships with one or more issuers of health or stop-loss insurance or their subsidiaries.

If an entity or organization is awarded a navigator or non-navigator grant, conflict-of-interest rules apply to its entire staff. Certified application counselors must disclose potential conflicts of interest either to an exchange or an exchange-designated organization.

Exchange Standards

In May 2014 CMS issued final rules designed to further protect enrollees and prevent possible abuse in outreach and enrollment activities. The rules require navigators, non-navigators, and certified application counselors to ensure that applicants are informed of the functions and responsibilities of navigators and other assistance personnel. In addition, they must obtain authorization from a consumer prior to obtaining access to the consumer's personally identifiable information and maintain a record of the authorization. A consumer may revoke the authorization at any time.

In addition, the final rules state that navigators, non-navigators and certified application counselors

May not be compensated by their organizations on a per-application, per-individual assistance, or per-enrollment basis. The provision, which takes effect on November 15, 2014, applies to federally funded exchanges. May not charge any applicant or enrollee, or request or receive any form of remuneration from or on behalf of an individual applicant or enrollee, for assistance related to assister duties. May not provide gifts, gift cards, or cash of more than nominal value ($15) or items of any value that market or promote products or services of a third party. (Gifts, gift cards, or cash that exceed nominal value may be used to reimburse applicants for legitimate expenses incurred while seeking assistance through an exchange, such as postage or travel expenses.) May not solicit consumers for application or enrollment assistance by going door-to-door or through other direct contact such as a phone call, unless the consumer initiates contact or has a preexisting relationship with the assister organization and other applicable state and federal laws are complied with. Outreach and education activities may be conducted by going door-to-door or through other unsolicited contact, including phone calls. May not use automatic telephone dialing systems or prerecorded voice messages to initiate contact with a potential enrollee unless there is a preexisting relationship with the consumer and other applicable laws are complied with.

CMS rules also allow consumers to change plans if assisters make an error in their application. (See "Special Enrollment Period.")

Training and Certification

CMS regulations include training standards for federally facilitated exchanges, including partnership exchanges, and for non-navigators at state-run exchanges funded through Section 1311 grants. The CMS training standards may also be used by state exchanges for their navigator programs and for any non-navigator programs funded outside of Section 1311 grants. State exchanges may also develop their own training, with approval by HHS.

Navigator and Non-navigator Training

To be certified by an exchange, navigator and non-navigator personnel at federally facilitated exchanges, including partnership exchanges, and all federally funded non-navigators at state-based exchanges, must

Complete 20 hours of HHS-approved training and receive a passing score on HHS-approved exams. Annual certification or recertification is required. Be prepared to serve both the individual and SHOP exchanges and to provide services that meet the language and cultural needs of various populations, and of disabled individuals.

CMS originally called for up to 30 hours of training, but reduced the required training to 20 hours. State-run exchanges may have much more extensive training.

CMS rules require that navigators and covered non-navigators undergo training that includes eligibility and enrollment rules and processes; the full range of QHPs offered at an exchange; the range of insurance options including Medicaid and CHIP and other public programs; eligibility requirements for government assistance; the tax implications of enrollment decisions; privacy and security requirements; how to appeal an enrollment decision; outreach methods; and how to work effectively with people with disabilities or limited language skills. Privacy training must include processes for safeguarding health information, income and tax information, and Social Security numbers. The CMS August 2013 Health Insurance Marketplace Navigator Standard Operating Procedures Manual is a guide for navigators in helping consumers.

The regulations also require that navigators must develop, maintain, and regularly update a body of general knowledge about the racial, ethnic, and cultural groups in their service areas, including the primary language spoken. Navigators and non-navigators must provide information in a consumer's preferred language at no cost to the consumer, as well as auxiliary aids and services for the disabled, at no cost where necessary. Navigators and non-navigators are required to recruit and promote a staff that is representative of the demographic characteristics of their service area, including the languages spoken. Navigators and non-navigators must also provide appropriate materials and assistance to individuals with disabilities.

Certified Application Counselor Training

Certified application counselors must complete and achieve a passing score on a certification exam. Training materials are more limited than for the navigator program, because the counselor program is more limited. For example, counselors do not have to receive training regarding certain federal health programs since they will not be directly referring potential enrollees to such programs. Counselors could also refer individuals with disabilities to navigator or non-navigator programs or to an exchange call center to ensure they receive appropriate services.

Privacy Protections

CMS regulations to implement the ACA include rules and procedures designed to protect enrollee privacy (45 C.F.R. 155.260). (See the Appendix .) The privacy and information requirements, which are in addition to other applicable state and federal laws, generally limit the collection, use, retention, and disclosure of personally identifiable information such as Social Security numbers. CMS regulations require exchanges to include these security and privacy requirements in any contract with non-exchange entities such as navigators, brokers, and agents that

gain access to personally identifiable information submitted to an exchange; or collect, use, or disclose personally identifiable information gathered directly from applicants, qualified individuals, or enrollees while that individual or entity is performing the functions outlined in the agreement with the exchange.

CMS regulations also require that navigators and non-navigators receive training in privacy standards and procedures, as part of their overall training. Personnel who willingly violate exchange privacy and security policies are subject to a fine of up to $25,000 per disclosure. States may set additional eligibility criteria and background checks for navigators and non-navigators, so long as they do not prevent the application of Title I of the Affordable Care Act.

CMS has taken other actions in the case of certified application counselors. Federally facilitated exchanges will only designate outside organizations that (1) have processes in place to screen their staff members and volunteers who are certified application counselors to ensure that they protect personally identifiable information, (2) engage in services that position them to help those they serve with health coverage issues, and (3) have experience providing social services to the community. The organizations must submit an application to an exchange and agree to comply with applicable rules and statutes. Exchanges can withdraw from the arrangements if outside organizations and their staff do not meet agreed terms or violate privacy standards, for example.

Brokers and agents are to comply with exchange privacy and security standards through agreements with federally facilitated exchanges. The agreements will spell out how agents and brokers may use personally identifiable information and their duties to protect such data and train staff in use of the information. They will also prohibit the use of such data for any purpose other than the specific functions in the agreement, related to exchange enrollment.

CMS will monitor federally facilitated exchanges, as well as non-exchange entities associated with the exchange, for compliance with privacy and security standards established by the exchange. In addition, the HHS will oversee and monitor state exchanges, while the state exchanges will oversee non-exchange entities required to comply with the privacy and security standards set out by a state exchange. HHS oversight may include audits, investigations, inspections, and other activities.

Federally facilitated exchanges, non-exchange entities associated with federal exchanges, and state-based exchanges will be required to report any privacy or security incident or breach to HHS. Non-exchange entities associated with state exchanges will be required to report incidents and breaches to a state exchange.

State and Exchange Licensing and Certification

The ACA gives states and exchanges authority to impose additional licensing, certification, or other standards for navigators. The ACA also contains a provision clarifying that state laws that do not prevent implementation of Title I of the ACA (which creates the exchanges and the navigator program) are not preempted by the ACA.

CMS regulations interpret the ACA to mean that licensing, certification, and other state and exchange standards apply so long as they do not prevent the application of ACA Title I. Along those lines, CMS has determined that states and exchanges are prohibited from imposing any requirement that would, in effect, require all navigators to be licensed agents or brokers.

ACA regulations define an agent or broker as ''a person or entity licensed by the State as an agent, broker, or insurance producer.'' According to CMS, if states required that every navigator go through a specific licensing process to become an agent or broker, then agents and brokers would be the only types of navigators allowed to operate at the exchanges. That, in turn, would violate a provision of ACA rules mandating that each exchange have at least two different types of navigators, including one community or consumer-focused non-profit group. The list of organizations and individuals eligible to become navigators includes chambers of commerce, unions, and health workers. (See " Eligibility to Become a Navigator .")

In May 2014, CMS issued final rules that provide additional guidance regarding potential state standards that would prevent the application of ACA Title 1. State standards that would prevent application of Title 1 include, but are not limited to

requirements that navigators and non-navigators refer consumers to other entities not required to provide fair, accurate, and impartial information; requirements that would prevent navigators and non-navigators from providing services to all persons to whom they are required to provide assistance; requirements that would prevent navigators and non-navigators from providing advice regarding substantive benefits or comparative benefits of different health plans; and imposing standards that would, as applied or as implemented in a state, prevent the application of federal requirements applicable to navigator and non-navigators entities or individuals or applicable to the exchange's implementation of the navigator and non-navigator program.

Navigator and Non-navigator Funding

Federally facilitated exchanges and partnership exchanges use federal Prevention and Public Health Fund (PPHF) dollars for grants to navigators. CMS on August 15, 2013, awarded $67 million in 12-month grants to 105 organizations at federally facilitated and partnership exchanges. The grantees began assisting with enrollment in October 2013. (See Table 2 .)

CMS allocated the funding for each state based on the number of uninsured residents in the state under the age of 65 as a share of the overall number of uninsured in states with a federally facilitated or partnership exchange. The amount of funding awarded to each navigator via the application process was based on the breadth of its proposed educational and outreach activities and the size of the population to be served. Each navigator applicant was eligible for one non-renewable, one-year cooperative agreement award, though HHS may end funding early in certain cases. Grantees included food banks, county commissioners, hospitals and health systems, universities, legal aid societies, Planned Parenthood chapters, a health plan for uninsured fishermen, and American Indian health services.

CMS has announced a second round of navigator grants, for the 12-month period beginning in September 2014. Each participating state will be eligible for at least $600,000 in navigator funding.

Section 1311 of the ACA provides indefinite (i.e., unspecified) amounts of money for planning and establishment grants for exchanges. For each fiscal year, the Secretary is to determine the total to be made available to each state for exchange grants. However, no grant may be awarded after January 1, 2015. ACA Section 1311 (i)(6) prohibits exchanges from using Section 1311 establishment funds to fund navigator grants. CMS regulations allow state-based exchanges and consumer partnership exchanges to use Section 1311 exchange grants to fund non-navigator assistance programs during their initial year of operation. Section 1311 funds may also be used to cover an exchange's cost of administering the navigator program, including training, grants management, and oversight.

State-based exchanges appear to have spent more for outreach than have federally facilitated exchanges. A study of select exchanges by The Urban Institute found that state exchanges spent an average of $30.66 in outreach per beneficiary, compared to $11.49 at federally facilitated and partnership exchanges. The study also found that states operating their own exchanges tended to have more stringent training requirements. Likewise, a Kaiser Family Foundation survey found that states with partnership or state-run exchanges had about twice as many assisters per 10,000 uninsured consumers as states with federally facilitated exchanges.

Brokers and Agents

U.S. health insurance agents and brokers, collectively called "producers," are a contact point between insurance companies and applicants, helping individuals and businesses choose suitable policies. According to the Bureau of Labor Statistics (BLS), producers selling all types of insurance, including health policies, held about 443,400 jobs in 2012 and had median annual wages of $48,150. Insurance producers are a major segment of the U.S. financial services industry, offering annuity products, comprehensive financial planning services, such as retirement and estate planning, and business pension planning.

Though insurance producers work with consumers, they are paid by insurance companies. An agent may be a so-called captive agent who works for one insurance firm, or an independent agent who sells products from a variety of insurers. Independent agents may be paid via commission, while those working for an agency or insurer may receive a salary, often plus commission or bonus. An insurance broker generally represents a wider array of insurance products than an agent, and assumes a greater role in assessing the potential risk profile and insurance requirements of a client, including overall insurance needs and appropriate policies.

A web-based insurance broker may offer products from a variety of insurers on a central website. Potential clients enter basic information into the site, such as zip code and family size, and are then presented with an array of possible insurance plans. Shoppers can search for plans in different ways such as company name, average monthly cost, premiums, and other variables.

Licensing

With the exception of government-sponsored insurance programs (e.g., Medicare Advantage), agent and broker activity usually is regulated by the states, which prohibit unfair sales practices and require producers to meet certain standards to become licensed.

The ACA includes several provisions that affect brokers and agents. In addition to the navigator/non-navigator program, the ACA's Medical Loss Ratio (MLR) provisions require certain large group health plans to spend at least 85% of revenues on benefits to enrollees, rather than administration or profits, while small group and individual plans must meet an 80% MLR requirement. Under CMS regulations, commissions and fees paid to brokers and agents are counted as insurance company administrative costs. Producers say that some insurance companies have reduced their commissions in an effort to contain administrative costs and meet the MLR requirements.

Exchange Requirements

Agents and brokers play a role in selling QHPs to both individuals and small businesses. CMS regulations were designed to allow exchanges to "leverage the market presence of agents and brokers ... to draw consumers to the Exchange and to QHPs." Exchanges may allow agents and brokers to help individuals enroll directly through an exchange website, or through outside issuer web sites, so long as they meet certain exchange standards and safeguards. Brokers or agents that discover that a potential client is qualified for federal health programs, such as Medicaid or CHIP, are expected to direct them to the appropriate public agency for assistance.

Federally Facilitated and Partnership Exchanges

CMS regulations set out processes for licensed agents, brokers, and web-based brokers to help consumers and employers enroll in QHPs through federally facilitated exchanges, as well as to continue to sell other, off-exchange insurance options. Federally facilitated and partnership exchanges do not pay commissions to brokers, nor do they place a cap on agent and broker commissions for selling QHPs. CMS rules do, however, require insurance companies to pay similar broker compensation for QHPs offered through such exchanges, as for similar health plans offered outside such exchanges.

In states with federally facilitated or partnership exchanges, CMS requires agents and brokers to register by providing proof of identity, completing an exchange-specific training course, and agreeing to comply with federal and state laws and regulations, including those regarding privacy and security.

After producers have completed the required steps and are certified by an exchange they receive an exchange user ID, which they can use, along with their national producer number, to make transactions and receive compensation from insurers.

Brokers and agents at federally facilitated and partnership exchanges can assist consumers either

through an issuer-based pathway, using an insurer's website, or through an exchange pathway, with the agent or broker helping the consumer on an exchange website.

For federally facilitated SHOP exchanges, agents and brokers will use the exchange website to carry out employer and employee applications.

Issuer-Based Enrollment

Since the fall of 2013, insurance agents have been allowed to assist individuals seeking QHPs by directly using insurance/issuer websites. Insurers are to assign agents and brokers to sell their products, are to check the agent or broker's license status, and are to ensure that the agent or broker is certified by an exchange.

An agent starts the signup process by logging on to an insurer's website (this is applicable in situations where the issuer has satisfied exchange requirements and has direct enrollment ability). Once a consumer is ready to apply for a QHP, the issuer website will redirect the producer and the consumer to the exchange website to complete the eligibility application. As part of the process, agents and brokers are expected to disclose to the consumer that they are providing information about QHPs for which they have a business relationship, and to tell the potential enrollee that he or she may look at other QHP options on the exchange. After the consumer is verified as eligible to buy a QHP, the exchange will redirect the producer and client back to the insurer's website to compare plans and make a selection.

Exchange Website

Agents and brokers may assist consumers and qualified small employers and their employees directly on an exchange website. Agents and brokers may help consumers create exchange accounts, but the consumer (or an authorized representative) must create his or her own secure password and user name and should not share that information with third parties, including producers. When an agent uses an exchange website, all QHPs are to be displayed.

State-Based Exchanges

State-based exchanges will continue to license and regulate agents and brokers, including those who sell QHPs through the exchange. States may require continuing education or exchange-based training for producers, including state-specific training. States may implement additional requirements, such as mandating that producers provide information to consumers about all available QHPs, not just those for which they receive a commission. State-based exchanges may allow brokers and agents to be directly compensated through an exchange or through issuer-based commissions, and may allow agents and brokers to help enroll an individual in a QHP in a "manner than constitutes enrollment through the exchange."

Web-Based Brokerages

Federally facilitated and partnership exchanges are to work with web-based brokers, to the extent allowed by a state (the main entity licensing and regulating agents and brokers). While state-based marketplaces have latitude to set conditions for web-based brokers, CMS regulations require that the exchanges must perform enrollee eligibility determinations for individuals who sign up for QHPs. In addition, the state-based exchanges must transmit enrollment information to QHP issuers for all individuals enrolling through the marketplace.

CMS regulations impose additional marketing restrictions on web-based brokers to ensure, in part, that consumers do not mistake their websites for official exchange websites. Web-based brokers must display available information on QHPs offered through an exchange, and provide consumers with the ability to view all exchange QHPs. Web brokers may not provide financial incentives, such as rebates or giveaways, and must allow consumers to withdraw from the application process and use the exchange website at any time.

CMS will require web-based brokers to display a disclaimer including the fact that their website might not contain all QHP information available on the exchange website. Web brokers selling products offered on federally facilitated exchanges will have to use an HHS-approved disclaimer indicating that the website is not a federally facilitated exchange website, that their website might not contain all QHP information available on the exchange website, and that the broker is subject to exchange marketing and privacy regulations. Brokers must also provide links to the appropriate exchange. CMS is currently developing guidance regarding display of such disclaimers.

Direct Enrollment Through Insurers

CMS anticipates some consumers may contact insurance companies directly to enroll in QHPs. In such cases, exchanges would have the option of allowing insurers to enroll the consumers into QHPs in a manner that is considered to be enrollment through an exchange. Under CMS rules, in order for issuer enrollment to be considered as enrollment through an exchange, the insurer's website must provide applicants the option of looking at all QHPs offered by the insurer, distinguish between QHPs for which the consumer is eligible and other health plans that the insurer may offer, and make clear that the tax credits and subsidies apply only to QHPs through an exchange. The insurer must use an HHS-approved disclaimer to let consumers know of other QHPs through the exchange, as well as provide a weblink to the exchange. In addition, the insurer must charge the enrollee the same premium that is charged for the QHP on an exchange, after accounting for any federal subsidy.

If permitted by an exchange, and to the extent permitted by state law, an insurer may allow its issuer application assisters to help consumers apply for an eligibility determination through an exchange; apply for tax credits and other cost-sharing; and help select a QHP offered by the issuer. There must be an agreement between the insurer and the exchange under which the issuer application assisters (1) are trained in QHP options, insurance affordability programs, eligibility, and benefit rules and regulations; (2) comply with exchange privacy and security standards; and (3) comply with state laws regarding the sale, solicitation, and negotiation of health insurance products, including laws related to agent, broker, and producer licensing; confidentiality; and conflicts of interest.

Previous Insurance Education and Outreach Efforts

HHS has carried out previous, major health insurance education and enrollment efforts, including enrollment efforts under the Medicare Part D prescription drug program and the Children's Health Insurance Program (CHIP). Medicare also funds the State Health Insurance Assistance Program (SHIP), which offers education and other assistance to Medicare beneficiaries and their families. These efforts differ in significant ways from current, ACA outreach efforts, but have similarities including broad public relations and advertising components and extensive use of trained volunteers and community groups to help consumers make decisions about health insurance. CMS officials have looked to the programs for lessons and guidance as they launch the in-person assistance programs.

In general, government and private sector analyses of the earlier HHS efforts indicate that the most effective outreach includes a variety of techniques including distributing information via mass media; cooperation between federal and state agencies, non-profit and business organizations; and the use of community groups and individual counseling to reach low-income consumers and those with language barriers or physical disabilities.

Medicare Part D

Congress approved the voluntary, Medicare Part D prescription drug program in the Medicare Modernization Act of 2003 (MMA, P.L. 108-173 ). Similar to the structure of the ACA, Part D enrollees may choose from a variety of private insurance plans. An estimated 42 million Medicare beneficiaries were eligible for the initial Part D benefit. The MMA also shifted dual eligible beneficiaries—individuals who qualify for both Medicare and Medicaid—to Part D from the Medicaid program. Medicare beneficiaries were eligible to apply for a transitional, temporary drug discount card program for 2004-2005, with the full Part D benefit taking effect on January 1, 2006.

Congress provided $1 billion to implement Medicare Part D. According to a GAO audit of the program, HHS used about $99 million of the $1 billion for direct outreach and education activities, including $67.3 million for materials targeted at beneficiaries and $31.6 million for efforts to reach out to Medicare providers. For example, CMS paid the public relations firm Ketchum $47.3 million for outreach initiatives including a bus tour that targeted key cities to promote the prescription drug program. Other CMS spending included more than $234 million to operate a 1-800 help line to answer questions about the Part D program, according to the GAO.

As part of the overall effort, HHS, the Social Security Administration (SSA), state Medicaid programs, and other entities implemented a coordinated education and outreach campaign, focusing on low-income beneficiaries. The project included distributing more than 70 written publications, creating the toll-free help line, and posting information on the Medicare website. CMS worked with coalitions that included the National Alliance for Hispanic Health, the National Association of Area Agencies on Aging, the National Council on Aging, and the Pharmaceutical Research and Manufacturers Association. The Regional Education about Choice in Health (REACH) program was aimed at beneficiaries with language, literacy, income, and other barriers to access, while the Access to Benefits Coalition (ABC) was a group of nonprofits including AARP, the Salvation Army, and the American Hospital Association, and 56 local coalitions. Pharmaceutical and insurance companies were active in outreach efforts, including the Medicare Rx Education Network. CMS also worked through State Health Insurance and Assistance Programs (see below) and increased funding to the SHIPs to help expand outreach.

Even with the coordinated efforts, millions of eligible low-income individuals did not sign up for the drug discount card, and Medicare Part D enrollment was initially less than expected. However, by 2010, 90% of those eligible had Part D drug coverage, retiree coverage subsidized by Medicare, or private coverage at least as comprehensive as the Part D benefit. More than 30 million beneficiaries were enrolled in Part D plans in 2013.

State Health Insurance and Assistance Programs (SHIP)

The State Health Insurance and Assistance Program (SHIP) provides counseling and information assistance to Medicare beneficiaries and their families regarding Medicare and other health insurance issues. The SHIP is authorized under Section 4360 of the Omnibus Budget Reconciliation Act of 1990 ( P.L. 101-508 ). Although the program's authorization of appropriations expired in FY1996, Congress continues to provide funding by transferring discretionary funding to the program from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund.

Paid and volunteer SHIP counselors provide one-on-one services to Medicare beneficiaries, both in person and by telephone. There are SHIP offices in all 50 states, as well as the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. Of the 54 SHIP grant programs, about two-thirds are administered by State Units on Aging established under the Older Americans Act (OAA extended by the OAA Extension of 2006, P.L. 109-365 ).

The more than 15,000 counselors at the 1,300 local SHIP sites serve more than 5 million consumers annually.

State SHIP programs provide training for volunteers, whose duties include answering questions about Medicare, Medigap supplemental insurance, Medicare Part C, Medicare Part D, and low- income subsidies. CMS, as part of its grant making, requires SHIPs to demonstrate how their training and certification programs will ensure that counselors provide accurate information. CMS provides materials for use in creating state certification programs, and analyzes SHIP performance each year. According to a recent survey of SHIP offices, initial counselor training averages 20.5 hours, and about 75% of the programs require counselors to pass a certification test. CMS runs a National Medicare Training Program that assists SHIP and other volunteers.

Children's Health Insurance Program

The State Children's Health Insurance Program (CHIP) was established in the Balanced Budget Act of 1997 (BBA 97; P.L. 105-33 ). The law was reauthorized in The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3 ). In general, CHIP allows states to cover targeted, low-income children in families with no insurance and incomes above state Medicaid limits.

The BBA 97 allowed states to spend up to 10% of their initial CHIP benefit spending on administrative costs, including outreach (as opposed to 10% of the CHIP annual appropriated level). The law also permitted additional flexibility for states that expanded their Medicaid programs under CHIP. In this case, states were allowed to claim federal financial participation for administrative costs under either Medicaid or CHIP. In the Consolidated Appropriations Act of 2001 ( P.L. 106-554 ), Congress permitted states to use up to 10% of their unspent FY1998 funds specifically for outreach activities. These outreach funds were above and beyond funding available under the existing 10% cap. There was also private funding to supplement the public outreach efforts, including funding from the Robert Wood Johnson Foundation.

Enrollment efforts included hiring outreach workers, ranging from welfare recipients to professionals and community groups, and distributing advertising and informational materials. As was the case with Part D, HHS and state Medicaid agencies worked with community groups, health care providers, and schools to contact potential beneficiaries. According to the GAO, enrollment began slowly but picked up. By the end of 2000, about three years after the law was enacted, all states had implemented their programs.

Federal agencies, including the SSA and the Departments of Agriculture, the Interior, Education, HHS, Housing and Urban Development, Labor, and the Treasury, were involved in outreach efforts. As the program progressed, states found that one-on-one efforts with community and other groups became more important in terms of connecting with hard-to-reach groups, such as immigrants and people with limited English skills. States worked with an array of groups, including religious organizations, chambers of commerce, private businesses, community health centers, and education organizations not just for outreach, but to help families fill out enrollment forms and submit applications. States also simplified enrollment forms, coordinated data with their Medicaid programs, and increased their use of technology to speed up the process.

CHIPRA built on this system and authorized up to $100 million in outreach and enrollment grants for fiscal years 2009 through 2013. The bulk of the authorized funds, 80%, were to be allocated to states and community-based organizations for outreach campaigns focusing on rural areas and underserved populations. The ACA expands the time period for the CHIPRA outreach and enrollment grants through 2015 and increases the appropriation level to $140 million for FY2009-FY2015.

There are some significant differences between initial CHIP enrollment and the exchange outreach effort. The scope of the CHIP target population is far smaller than the potential exchange population. In addition, the CHIP statute was not prescriptive in terms of telling states how to meet screening and enrollment requirements to determine eligibility for Medicaid and/or CHIP. States had an incentive to enroll children in CHIP, because the states were eligible for enhanced federal matching funds to expand coverage to low-income uninsured women and children, without necessarily expanding their Medicaid programs.

Outstanding Issues

Some lawmakers have raised questions and concerns about the navigator programs. Two subcommittees of the House Committee on Oversight and Investigations in May 2013 held a joint hearing on implementation of the navigator program.

Adequacy of Privacy Protections

Some Members of Congress, state legislators, health care advocacy groups, and brokers and agents have raised questions about whether CMS regulations go far enough to ensure protection of enrollees' personal information, such as Social Security numbers.

Lawmakers have asked HHS for additional information about how much access navigators, non-navigators, and certified application counselors will have to enrollees' personal information. Lawmakers have asked to see specific training materials and have sought information regarding handling of documents and potential background checks of navigator personnel. A group of 13 attorneys general in an August 14, 2013 letter also raised concerns about the privacy regulations.

In an effort to strengthen privacy protections, HHS in May 2014 final rules required that navigators, non-navigators, and certified application counselors obtain authorization from a consumer before accessing his or her personally identifiable information, and maintain a record of the authorization. Consumers have a right to revoke the authorization at any time.

The potential for privacy violations and other consumer swindles extends well beyond exchange-sanctioned consumer assistance programs, however. The Federal Trade Commission warned consumers in 2012 about scam artists seeking to obtain personal information under the guise of verifying information regarding ACA coverage.

Appendix. CMS Exchange Privacy Requirements

45 CFR § 155 .260 Privacy and security of personally identifiable information.

(a) Creation, collection, use and disclosure. (1) Where the Exchange creates or collects personally identifiable information for the purposes of determining eligibility for enrollment in a qualified health plan; determining eligibility for other insurance affordability programs, as defined in 155 .20; or determining eligibility for exemptions from the individual responsibility provisions in section 5000A of the Code, the Exchange may only use or disclose such personally identifiable information to the extent such information is necessary to carry out the functions described in § 155 .200 of this subpart.

(2) The Exchange may not create, collect, use, or disclose personally identifiable information while the Exchange is fulfilling its responsibilities in accordance with § 155 .200 of this subpart unless the creation, collection, use, or disclosure is consistent with this section.

(3) The Exchange must establish and implement privacy and security standards that are consistent with the following principles:

(i) Individual access. Individuals should be provided with a simple and timely means to access and obtain their personally identifiable information in a readable form and format;

(ii) Correction. Individuals should be provided with a timely means to dispute the accuracy or integrity of their personally identifiable information and to have erroneous information corrected or to have a dispute documented if their requests are denied;

(iii) Openness and transparency. There should be openness and transparency about policies, procedures, and technologies that directly affect individuals and/or their personally identifiable information;

(iv) Individual choice. Individuals should be provided a reasonable opportunity and capability to make informed decisions about the collection, use, and disclosure of their personally identifiable information;

(v) Collection, use, and disclosure limitations. Personally identifiable information should be created, collected, used, and/or disclosed only to the extent necessary to accomplish a specified purpose(s) and never to discriminate inappropriately;

(vi) Data quality and integrity. Persons and entities should take reasonable steps to ensure that personally identifiable information is complete, accurate, and up-to-date to the extent necessary for the person's or entity's intended purposes and has not been altered or destroyed in an unauthorized manner;

(vii) Safeguards. Personally identifiable information should be protected with reasonable operational, administrative, technical, and physical safeguards to ensure its confidentiality, integrity, and availability and to prevent unauthorized or inappropriate access, use, or disclosure; and,

(viii) Accountability. These principles should be implemented, and adherence assured, through appropriate monitoring and other means and methods should be in place to report and mitigate non-adherence and breaches.

(4) For the purposes of implementing the principle described in paragraph (a)(3)(vii) of this section, the Exchange must establish and implement operational, technical, administrative and physical safeguards that are consistent with any applicable laws (including this section) to ensure—

(i) The confidentiality, integrity, and availability of personally identifiable information created, collected, used, and/or disclosed by the Exchange;

(ii) Personally identifiable information is only used by or disclosed to those authorized to receive or view it;

(iii) Return information, as such term is defined by section 6103(b)(2) of the Code, is kept confidential under section 6103 of the Code;

(iv) Personally identifiable information is protected against any reasonably anticipated threats or hazards to the confidentiality, integrity, and availability of such information;

(v) Personally identifiable information is protected against any reasonably anticipated uses or disclosures of such information that are not permitted or required by law; and

(vi) Personally identifiable information is securely destroyed or disposed of in an appropriate and reasonable manner and in accordance with retention schedules;

(5) The Exchange must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.

(6) The Exchange must develop and utilize secure electronic interfaces when sharing personally identifiable information electronically.

(b) Application to non-Exchange entities. Except for tax return information, which is governed by section 6103 of the Code, when collection, use or disclosure is not otherwise required by law, an Exchange must require the same or more stringent privacy and security standards (as § 155 .260(a)) as a condition of contract or agreement with individuals or entities, such as Navigators, agents, and brokers, that:

(1) Gain access to personally identifiable information submitted to an Exchange; or

(2) Collect, use or disclose personally identifiable information gathered directly from applicants, qualified individuals, or enrollees while that individual or entity is performing the functions outlined in the agreement with the Exchange.

(c) Workforce compliance. The Exchange must ensure its workforce complies with the policies and procedures developed and implemented by the Exchange to comply with this section.

(d) Written policies and procedures. Policies and procedures regarding the creation collection, use, and disclosure of personally identifiable information must, at minimum:

(1) Be in writing, and available to the Secretary of HHS upon request; and

(2) Identify applicable law governing collection, use, and disclosure of personally identifiable information.

(e) Data sharing. Data matching and sharing arrangements that facilitate the sharing of personally identifiable information between the Exchange and agencies administering Medicaid, CHIP or the BHP for the exchange of eligibility information must:

(1) Meet any applicable requirements described in this section;

(2) Meet any applicable requirements described in section 1413(c)(1) and (c)(2) of the Affordable Care Act;

(3) Be equal to or more stringent than the requirements for Medicaid programs under section 1942 of the Act; and

(4) For those matching agreements that meet the definition of "matching program" under 5 U.S.C. 552a(a)(8), comply with 5 U.S.C. 552a(o).

(f) Compliance with the Code. Return information, as defined in section 6103(b)(2) of the Code, must be kept confidential and disclosed, used, and maintained only in accordance with section 6103 of the Code.

(g) Improper use and disclosure of information. Any person who knowingly and willfully uses or discloses information in violation of section 1411(g) of the Affordable Care Act will be subject to a civil penalty of not more than $25,000 per person or entity, per use or disclosure, in addition to other penalties that may be prescribed by law.