Health Insurance Broker Compensation Disclosures Coming in 2022

Health Highlights

The Consolidated Appropriations Act, 2021 (CAA), made dozens of changes to health care regulation, including a landmark ban on surprise medical billing. Easily overlooked were new compensation disclosure requirements related to health insurance brokers that will be required beginning in 2022.

The Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments), with the Office of Personnel Management, have released proposed rules that require issuers of individual health insurance coverage and short-term, limited-duration insurance to disclose to applicants and policyholders the commissions that insurance agents and brokers earn for selling the coverage. Information on commissions actually paid would be reported to HHS. This appears to be designed to bring to light how broker compensation could be encouraging the sale of short-term, limited-duration insurance, which is exempt from most federal health insurance laws.

The Department of Labor has not issued guidance on a companion CAA provision that added a requirement to the Employee Retirement Income Security Act of 1974 (ERISA) to require certain group health plan service providers to disclose to the plan sponsor information about compensation paid to the providers in connection with brokerage or consulting services.

Comments on the proposed rules are due October 18, and HHS is expected to finalize the rules in the fall because at least some of these provisions become applicable on December 27, 2021. The proposed rules also include unrelated provisions on air ambulance reporting requirements and enforcement of CAA provisions.

The proposed rules would require that broker commission information be provided to applicants before their plan selection is finalized and, in addition, as part of their initial enrollment confirmation package (or similar documentation) and at plan renewal. HHS is also proposing to require that health insurance issuers report to HHS the actual compensation they paid brokers and agents in the prior year for enrollments in individual market and short-term, limited-duration coverage.

NOTE: To help you navigate the challenges and complexities that the No Surprises Act (NSA) introduces, Manatt Health is launching an NSA Toolkit that includes four high-value components to be delivered across the next six months:

1. An NSA Tracker that will track guidance from state and federal regulators on how state and federal laws apply. Updated every two weeks to keep pace with new developments, the tracker will provide brief summaries as well as links to each state regulation, bulletin or other guidance.

2. Deep-dive analyses of all new NSA-related regulations and their implications.

3. Detailed checklists for providers and payers providing a step-by-step road map to compliance requirements.

4. Access to Manatt on Health: Insights You Trust, Manatt’s premium information service that delivers in-depth insights and analysis focused on the legal, policy and market developments that matter to you, keeping you ahead of the trends shaping our evolving health ecosystem. Manatt on Health includes weekly analyses of federal and state health reform activity; detailed regulatory and guidance summaries and analyses of key federal legislation; and 50-state trackers of state actions across a range of key topics, from telehealth changes to 340B to Drivers of Health. The NSA Toolkit gives you three options for accessing  Manatt on Health—a full 12-month subscription at a 10% discount, a six-month subscription or a one-month free trial.

To learn more, contact Barret Jefferds, director, Manatt Health, at bjefferds@manatt.com.

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