5/16/14 CMS Final Rule-Almost 500 Pages

[RayNY]

http://www.cms.gov/CCIIO/Resources/...nloads/508-CMS-9949-F-OFR-Version-5-16-14.pdf

Your legal reading for the week. It includes some attention getting information, the "Civil Monetary Penalties" caught my eye.

"Navigators, non-Navigator assistance personnel, certified application counselor designated organizations, and certified application counselors in FFEs" may be subject to civil monetary penalties if they violate federal requirements ($100, per day, per individual affected).

"(155.285(c)(i-ii)) Any person who fails to provide correct information as specified in paragraph (a)(1)(i) of this section may be subject to a maximum civil money penalty of $25,000 for each application, as defined at paragraph (c)(1)(iii) of this section, pursuant to which a person fails to provide correct information. (ii) Any person who knowingly and willfully provides false information as specified in paragraph (a)(1)(ii) of this section may be subject to a maximum civil money penalty of $250,000 for each application, as defined at paragraph (c)(1)(iii) of this section, on which a person knowingly and willfully provides false information. "

Of course, brokers are a "person" who would have provided info to the exchange, as clearly defined by name in 155.285(a)(2)

What change catches your eye?

 

[Yagents]

The indemnity portion is damning to that industry. What are considered fixed indemnity? Lots of other things going on in this new regulation


HHS sets complicated fixed indemnity rules | LifeHealthPro

But HHS said it would let an insurer sell a fixed indemnity policy only to consumers who have MEC -- enough major medical coverage to get the consumers out of having to pay the penalty PPACA is supposed to impose on taxpayers who lack a minimum amount of coverage. In the new final regulations, HHS has decided that consumers who buy fixed indemnity coverage must have MEC. But insurers need not verify whether or not the buyers actually have MEC. Insurers simply must have the buyers state that they have MEC, CMS officials write in a preamble to the regulations. HHS has decided to let insurers sell fixed indemnity products to any consumer who has MEC, whether the MEC plan covers the essential health benefits or not.

CMS issues final rule on navigators, risk corridors for 2015 | Modern Healthcare

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And specific to your note on penalties:

$250K fine for lying on health insurance forms - The Washington Post

 

[xrac]

These penalties are absolutely insane.

 

[RayNY]

Yagents, all things considered, I think it might be a "least bad" result for the Fixed Indemnity market. MEC requirement is one thing, but at least it can still be offered without other restrictions, and lax verification requirements that put the onus on the enrollee. The other proposals varied from limiting the time it's available, to requiring QHP (not the less restrictive MEC), to requiring verification of MEC status. All of those are a bigger burden.

xrac, I can't disagree, especially when you consider a broker may be on the hook for a quarter million per app if it comes out that they knowingly mis-estimated client income, misstated availability of employer coverage, etc.

If you read the guidance, they make it clear those fines are maximums, and the actual amount is supposed to be in line with the crime. They're supposed to factor in things like the dollar cost of your "mistake", intention, history, and a few other factors. Realistically, I don't think we'll see many people, if anyone, pay the max.

 

[AllenChicago]

Next hhs will hire Chinese hackers to track down agents saying negative things about HHS on the forums and levy a big fine.

The government can't pay insurers but their systems for imposing penalties and punishments are well established...once they find you.

 

[Yagents]

Ray, if you're of the mind that thinks "it could have been worse", than fine...you're right. But that means it's getting worse to some degree from where it is now, and that's never a good thing.

Every agent/carrier is currently trying to figure out if it effects "me" and the products I sell.

I know I can sell an accident policy combined with a EHB MEC or just MEC plan, but can I sell it to someone without insurance at all? I don't think so.

Same question with Critical illness.

I sell them as supplements to MEC, and have never sold a limited health plan to any client.

 

[HealthGuy]

how about selling accident or CI coverage to a client you sell short term insurance but not a MEC plan? legal or not?

 

[dgoldenz]

Yagents, all things considered, I think it might be a "least bad" result for the Fixed Indemnity market. MEC requirement is one thing, but at least it can still be offered without other restrictions, and lax verification requirements that put the onus on the enrollee. The other proposals varied from limiting the time it's available, to requiring QHP (not the less restrictive MEC), to requiring verification of MEC status. All of those are a bigger burden.

xrac, I can't disagree, especially when you consider a broker may be on the hook for a quarter million per app if it comes out that they knowingly mis-estimated client income, misstated availability of employer coverage, etc.

If you read the guidance, they make it clear those fines are maximums, and the actual amount is supposed to be in line with the crime. They're supposed to factor in things like the dollar cost of your "mistake", intention, history, and a few other factors. Realistically, I don't think we'll see many people, if anyone, pay the max.

Good reason to let the clients fill out subsidy apps on their own. I'm not filling out someone's subsidy app for them, ever.

 

[xrac]

Yagents, all things considered, I think it might be a "least bad" result for the Fixed Indemnity market. MEC requirement is one thing, but at least it can still be offered without other restrictions, and lax verification requirements that put the onus on the enrollee. The other proposals varied from limiting the time it's available, to requiring QHP (not the less restrictive MEC), to requiring verification of MEC status. All of those are a bigger burden. xrac, I can't disagree, especially when you consider a broker may be on the hook for a quarter million per app if it comes out that they knowingly mis-estimated client income, misstated availability of employer coverage, etc. If you read the guidance, they make it clear those fines are maximums, and the actual amount is supposed to be in line with the crime. They're supposed to factor in things like the dollar cost of your "mistake", intention, history, and a few other factors. Realistically, I don't think we'll see many people, if anyone, pay the max.

Look at what FINRA does on fines for Mickey Mouse offense. Minimum is usually $5,000.

 

[kstein]

What indemnty plans are you writing in conjunction with ACA plans?