Healthcare regulations change continuously, and it’s crucial for brokers to stay up to date to ensure regulatory compliance. But it’s not just a professional obligation; it’s also essential for delivering high-quality service, protecting clients and ensuring the long-term success of a business. Regulatory awareness is a cornerstone of responsible and effective brokerage in the healthcare and insurance industries.
This article will give you a good idea of the key legislation every broker needs to understand, from HIPAA and the ACA to ethical and licensing standards.
Patient Privacy: HIPAA
The HIPAA Privacy Rule, established in 2003, sets national standards for protecting individually identifiable health information held by covered entities, including healthcare providers and health plans. It also applies to business associates that handle PHI on their behalf, including brokers.
Even though the latest HIPAA updates were introduced this year, new changes to the privacy rule are expected to take place in 2024. These changes include strengthening individuals’ rights to access their own health information, improving information sharing for care coordination and case management for individuals, and reducing administrative burdens on HIPAA-covered entities.
Affordable Care Act (ACA)
As of June 18, 2023, all agents selling ACA insurance plans in the Federally Facilitated Marketplace (FFM) must record and keep documents for all sales. Furthermore, the new regulation states that agents must be able to provide proof that they’ve received consent from their client or an otherwise authorized representative to help with their ACA coverage decisions. Agents must retain this documentation for at least 10 years and be able to display it upon request.
In the HHS Notice of Benefit and Payment Parameters for the 2024 final rule, the Centers for Medicare & Medicaid Services (CMS) finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web brokers, and assisters that help consumers with enrollment through marketplaces that use the federal platform.
In addition, the affordability threshold for employer-sponsored health coverage was set at 9.12% in 2023, down from 9.61% in 2022. Under the Affordable Care Act, businesses with more than 50 full-time employees must provide affordable healthcare options for those who qualify.
Telehealth & COVID-19
The COVID-19 pandemic introduced the proliferation of telehealth services. Several bills have been introduced to expand access to those telehealth services, such as the Telehealth Expansion Act of 2023 (S. 1699) and the KEEP Telehealth Options Act of 2023 (S. 731). These bills aim to address issues related to reimbursement of, access to, and quality of telehealth services.
Many commercial health plans have broadened coverage for telehealth services, providing more opportunities for reimbursement. Some of the temporary changes implemented during the pandemic may be phased out, however, so it’s important to stay current on the latest coverage policies. Additionally, telehealth licensure requirements vary at the federal, state and cross-state levels for healthcare providers. Brokers should be aware of the licensure requirements in the states where they operate to ensure compliance with telehealth regulations.
Coverage & Access
HHS has finalized policies to make coverage more accessible and expand behavioral healthcare access for millions of Americans in 2024. Starting on January 1, 2024, Federally-facilitated Marketplaces (FFMs) and State-based Marketplaces (SBMs) will be able to implement a new simplified employee pension plan (SEP) for people losing Medicaid or CHIP coverage. This SEP reduces gaps in coverage and allows for a more seamless transition into Marketplace coverage.
Ethics & Licensing
There are relatively few updates in this arena, but a change in California state law requires insurance brokers to earn a new hour of ethics continuing education (CE) focused on license fraud prevention.
What Happens If Brokers Are Noncompliant?
The penalties for noncompliance in the insurance industry can be significant, including fines, punitive damages, and regulatory and disciplinary actions.
In the healthcare industry, the penalties for noncompliance are not solely about the dollars involved, but also about the quality of patient care and the confidentiality of health data. For example, noncompliance with HIPAA regulations can result in civil monetary penalties ranging from $100 to $50,000 per violation, depending on the level of the violation.
Insurance companies are required to respond to insurance claims within a “reasonable amount of time” and to “deal in good faith” with clients. Payment for claims that include proof of loss must be disbursed within two to three months, or the insurance company must provide an official explanation as to why payment is delayed or denied. Health insurance brokers, as intermediaries between insurance companies and clients, are subject to the same compliance requirements and penalties as insurance companies.
Questions about regulations, compliance or other challenges facing brokers? Give us a call and we’ll be happy to put you in touch with an expert.