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    New Rules Proposed to Prohibit Persons Connected with Stop-Loss Insurance Coverage from being Health Insurance Exchange Navigators; New Disclosure Requirements also Proposed

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    The Centers for Medicare & Medicaid Services (“CMS”), part of the United States Department of Health and Human Services, has proposed new rules to create conflict-of-interest standards applicable to navigators.  Under the Patient Protection and Affordable Care Act (the “Act”), navigators will assist consumers in obtaining coverage from health insurance exchanges to be established under the Act.  Navigators will not be paid by health insurance companies and will not need to be licensed as insurance agents or brokers, but rather will be compensated by the exchanges themselves.

    Specifically, the proposed rules make entities affiliated with issuers of stop-loss insurance policies ineligible to become navigators, including those who are compensated directly or indirectly by issuers of stop-loss coverage.  Large employers that self-insure may use stop-loss insurance to cover claims over a certain attachment point, and CMS believes that stop-loss issuers or those they compensate, if allowed to become navigators, may be incentivized to direct smaller employers into self-funded plans too.  The new eligibility criteria are in addition to the Act’s prohibition on health insurance companies or persons that receive compensation from health insurance companies from becoming navigators.

    The proposed rules also require navigators to disclose to the exchanges and consumers their financial connections, if any, to other types of insurance, any employment relationships their staff members or their spouses/domestic partners had in the past five years with issuers of health insurance or stop-loss coverage, and any anticipated relationships with such issuers in the future.  This disclosure standard would apply only to federally run exchanges, state and federal partnership exchanges, and state-run exchanges funded by federal grants.

    The Centers for Medicare & Medicaid Services (“CMS”), part of the United States Department of Health and Human Services, has proposed new rules to create conflict-of-interest standards applicable to navigators.  Under the Patient Protection and Affordable Care Act (the “Act”), navigators will assist consumers in obtaining coverage from health insurance exchanges to be established under the Act.  Navigators will not be paid by health insurance companies and will not need to be licensed as insurance agents or brokers, but rather will be compensated by the exchanges themselves.

    Specifically, the proposed rules make entities affiliated with issuers of stop-loss insurance policies ineligible to become navigators, including those who are compensated directly or indirectly by issuers of stop-loss coverage.  Large employers that self-insure may use stop-loss insurance to cover claims over a certain attachment point, and CMS believes that stop-loss issuers or those they compensate, if allowed to become navigators, may be incentivized to direct smaller employers into self-funded plans too.  The new eligibility criteria are in addition to the Act’s prohibition on health insurance companies or persons that receive compensation from health insurance companies from becoming navigators.

    The proposed rules also require navigators to disclose to the exchanges and consumers their financial connections, if any, to other types of insurance, any employment relationships their staff members or their spouses/domestic partners had in the past five years with issuers of health insurance or stop-loss coverage, and any anticipated relationships with such issuers in the future.  This disclosure standard would apply only to federally run exchanges, state and federal partnership exchanges, and state-run exchanges funded by federal grants.

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