On May 1, the Center for Consumer Information and Insurance Oversight (CCIIO), a part of the Centers for Medicare and Medicaid Services (CMS), issued guidance on the “Role of Agents, Brokers, and Web-brokers in Health Insurance Marketplaces.” The marketplaces, commonly known as health insurance exchanges, are scheduled to be in operation for open enrollment on October 1, 2013, with coverage to take effect on January 1, 2014.
Marketplaces may be operated entirely by a state, entirely by the federal government for a particular state (“federally-facilitated”), or by a state in partnership with the federal government. For the latter two types of marketplaces, all agents and brokers will be required to register in advance with CMS before they can assist individual consumers with plan comparison, plan selection, and enrollment for insurance coverage. Agents and brokers will also be permitted to assist qualified employers and employees in enrolling for coverage through Small Business Health Options Programs (SHOPs).
In Federally-facilitated Marketplaces and State Partnership Marketplaces, the amount and terms of any agent or broker commission will be negotiated by the insurer and the agent or broker. These marketplaces will not establish commission schedules or pay commissions directly to agents or brokers. In contrast, individual states may elect to have their State-based Marketplaces compensate agents and brokers directly, or provide for insurers to pay commissions.
The CCIIO guidance also describes the process by which consumers may select a health insurance plan through the website of an agent or broker. Such “web-brokers” will be subject to requirements regarding disclosure of compensation, how information on various insurance plans will be displayed on the site, and applicable security standards. Web-brokers’ websites will also be required to disclose that they are separate from the Federally-facilitated Marketplace website.