Insurance Broker Blog

Affordable Care Act: What You Need to Know

Solstice knows our valued brokers likely have questions and concerns about their roles in the industry with the Patient Protection and Affordable Care Act (PPACA) being here to stay. Here’s the latest on what’s going on:

February 15, 2013, marked the deadline for states to let the Department of Health & Human Services (HHS) know what type of health care exchange they will set up in 2014. Florida, New Jersey and Tennessee were the latest to refuse to partner with the federal government or create their own online insurance marketplaces. The exchanges in these states—as well as others that have declined to set up either a partnership or their own exchange—will be run by the federal government at least through 2014. Then, those states will reassess whether they want to offer a state-run exchange or agree to partner with the federal government to create one.

The development of exchanges on the federal level seems to be behind schedule. In mid-February, the Senate Finance Committee met for a lengthy two-part hearing about the implementation of health insurance exchanges. The meetings featured biting criticism and skepticism from five key Democrats: Finance Committee Chairman Max Baucus (D-MT) and Senators Maria Cantwell (D-WA), Tom Carper (D-DE), Bill Nelson (D-FL) and Ron Wyden (D-OR). Sen. Baucus told Director of the Center of Consumer Information and Insurance Oversight (CCIIO) Gary Cohen that HHS “needs to get moving.” Cohen’s organization oversees exchange development and health reform implementation for HHS. Sen. Carper was very stern when he warned him, “You really need to be on your A game.”

This comes shortly after HHS delayed the requirement that employers notify all employees by March 1, 2013 of the existence of an exchange in 2014 until sometime over the summer. Now more than ever, employers are looking to their agents for guidance.

The PPACA creates entities known as Navigators whose main role will be to help people access coverage through the exchange. Those who may serve as Navigators include trade, industry and professional organizations, community and consumer-focused non-profit groups, chambers of commerce—and licensed insurance agents and brokers. The ACA provides clear conflict-of-interest protections for Navigators. They may not receive any direct or indirect payments from health insurers, and health insurers are explicitly prohibited from being Navigators. Navigators are to be funded through grants provided by state exchange funds.

Many feel Navigators will have their greatest impact on those looking to receive a subsidy for their coverage through the exchange. Currently, the application to see whether you qualify for a subsidy is 20+ pages long. Navigators can help people complete necessary paperwork to see if they qualify for a subsidy. Two such Navigator organizations that brokers should familiarize themselves with are Enroll America ( and Florida CHAIN ( Agents should visit these sites and sign up for their e-news updates to understand the messaging that will be delivered to many of their clients.

Role of the Agent
Brokers will have key roles when exchanges are rolled out, and they should be ready to jump on opportunities to assist clients. The CCIIO has stated that agents will be part of the Federal Exchange and will be compensated for their work. Additionally, the Centers for Medicare & Medicaid Services (CMS) anticipates that 90 percent of applications will be submitted online because of the convenience and numerous benefits of online applications. CMS believes that at this rate of electronic submission, 85 percent of applications will be facilitated by brokers, who will be required to submit information electronically.

It’s also important to note: several states have listed in their guidelines that an agent’s compensation should be the same both in and outside of the exchange. For example, the New York State Department of Health’s “Invitation to Participate in the New York Health Benefit Exchange, January 21, 2013” stipulates:

“Role of Brokers and Agents. To maximize access to health insurance coverage for residents of New York State, brokers and agents (collectively, “Producers”) will be permitted to assist both small businesses and individuals in purchasing coverage through the Exchange, provided that they have entered into an agreement with the Exchange…All of Health Insurer Applicants’ compensation arrangements with Producers must be the same inside and outside of the Exchange, and must comply with all applicable provisions of State law. For example, the commission for a small group product offered on the SHOP Exchange must be the same as the commission for a small group product offered outside of the Exchange. In addition, for the sale of Exchange products, the Applicant must contract with Producers that have successfully completed the required training program and have entered into agreements with the Exchange.”

To read the full text:

The Invitation clarifies that this applies to stand-alone dental applicants as well.

It’s evident that agents should look to partner with Navigators, and with new private exchanges that are being developed for products that are not regulated through ACA in 2014 and beyond. Solstice has a variety of ancillary products ready to go today and will help our agents navigate the exchange world.

Call your Solstice Account Executive today to set up an appointment and start planning—2014 will be here before you know it!