Two broker associations have expressed concern about the U.S. Department of Health and Human Services’ proposal to federalize regulation of navigator groups that enroll individuals in health care plans on the public exchanges. The organizations say the rule would usurp state efforts to enforce consumer protection laws and unnecessarily expand the role of navigators and assisters.

The HHS draft regulations were released March 14 as part of a 279- page proposed rule to address requirements for insurance issuers, exchanges, navigators, non-navigator assistance personnel and other entities under the Affordable Care Act. The rule proposes standards such as product discontinuation and renewal, quality reporting and minimum certification standards and responsibilities of private health insurance issuers, in addition to the navigator guidelines.

See related story: Feds: Navigators don’t need E&O coverage

While brokers are in favor of efforts to ensure the proper licensing and training of navigators, the proposed HHS rule “would undo much of the good work done at the state level to ensure these entities are properly regulated and consumers are protected,” says Charles Symington, senior vice president for external and government affairs at Independent Insurance Agents & Brokers of America Inc., known as the Big “I.”

“If the regulations are approved without changes, it will likely prove to be a dangerous mix for many insurance consumers who could be harmed by bad advice from an individual operating within one of these programs and left with no financial recourse,” says Ryan Young, senior director of federal government affairs at the Alexandria, Va.-based Big “I.” “We will continue to advocate in defense of allowing states to enact and enforce consumer protection laws.”

Health Agents for America President and CEO Ronnell Nolan agrees, saying the Baton Rouge, La.-based association supports the rule’s proposal that navigators meet certain standards or licensing requirements, but worries federal laws could preempt some already accepted state-level requirements.

“To date, 17 states have adopted licensure requirements, and in some cases, carry errors and omission insurance coverage to better protect consumers,” she writes in comments sent to HHS on the proposed rules. “States have traditionally been the primary regulator of insurance producers, and we would encourage [the Centers for Medicare and Medicaid Services] to afford states the widest possible latitude in determining the appropriate level of regulation for insurance navigators and other assistance personnel.”

HAFA also supports the rule’s recognition of state consumer protection laws that may require navigators or approved consumer assisters undergo fingerprinting or background checks before they can operate in a state, Nolan says.

The proposed rule would provide for the imposition of civil money penalties on navigators and similar entities that don’t comply with federal requirements — a move HAFA also supports.

Nolan, in her comments to the rule, has asked HHS to consider allowing navigators and non-navigator assistance personnel to work with an agent or broker, when a relationship is currently established. 

“Agents and brokers are required to obtain an insurance license, have errors and omissions insurance and take on-going continuing education courses that include ethics training,” she says. “Ethics courses teach agents and brokers to provide impartial, non-biased advice. We are held to a very high level of professionalism through each State Department of Insurance.”

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