(Editor’s Note: After this article appeared, the bill – including the broker compensation disclosure language – passed Congress and was signed into law by President Trump. Word & Brown will closely monitor the rules process and provide updates for broker planning purposes. Please watch future editions of the John & Rusty Report for details as they develop.)
Congress has sent President Donald Trump a giant spending and coronavirus relief package, the Consolidated Appropriations Act, 2021 (CAA 2021) package, that includes a sweeping health insurance agent and broker compensation disclosure provision.
- * A collection of documents related to the version of the Consolidated Appropriations Act, 2021, package that the House Rules Committee took up is available here.
- * The 5,593-page PDF file that contains the health agent and broker compensation disclosure provision, on page 4,475, is available here.
Congress broke the CAA 2021 package into parts when voting on it.
Members of the House voted 359-53 for the section containing the health insurance producer compensation disclosure section.
Members of the Senate approved the section by a 92-6 vote.
CAA 2021
The parts of the CAA 2021 package getting the most attention would provide funding for COVID-19 pandemic response efforts, such as extra funding for public health programs, an extra $300 per week in unemployment benefits for displaced workers, and one-time cash payments of $600 to taxpayers to Americans who earn less than $75,000 per year.
The heart of the package is appropriations provisions, or the statutes that give the U.S. Treasury Department, the U.S. Defense Department, the U.S. Department of Health and Human Services and other federal departments and agencies permission to spend the money necessary to stay in operation.
Health insurers, health care provider groups and others have given some attention to the No Surprises Act section. The No Surprises Act section is part of Division BB of the bill, which has the title “Private Health Insurance and Public Health Provisions.”
The No Surprises Act section
Drafters of the No Surprises Act section want to eliminate situations that lead to patients with health coverage getting huge, unexpected medical bills, or “surprise bills,” and going after patients for the balance between what the health insurers will pay and the full charges.
The No Surprises Act would keep out-of-network providers at in-network hospitals, air ambulance service providers, and other emergency services providers from “balance billing” patients for amounts far over typical in-network provider rates. The section would also set up an arbitration-based system for resolving rate disputes between insurers and out-of-network providers.
America’s Health Insurance Plans, a group for health insurers, has said that it likes much of the CAA 2021 package but believes the dispute resolution provision could make administering out-of-network claims and drive up costs.
The comp disclosure section
The health agent and broker comp disclosure provision is in a bundle of health care price transparency provisions that comes after the No Surprises Act section.
The health agent and broker comp provision is based on language that has been under serious discussion in the Senate since at least May 2019.
The provision is the fruit of efforts by Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Sen. Patty Murray, D-Wash., to lead a bipartisan effort to come up with ideas for improving the U.S. health care delivery and U.S. health care finance systems.
Another provision in the transparency section would ban price information confidentiality clauses in health coverage arguments.
AHIP and some independent antitrust experts have argued that, in some cases, bans on gag clauses could encourage health care providers to bid up their fees and drive up health care costs, rather than doing much to help patients shop for cheaper care.
The agent and broker comp disclosure provision is in Section 202 of Division BB.
The section would apply to a producer or entity expecting to earn more than $1,000 in direct or indirect compensation for selling or administering individual or group health coverage. ”Compensation” would mean “anything of monetary value,” but would not include “non-monetary compensation valued at $250 or less.”
Affected companies and individuals would have to disclosure their compensation to employers or individual coverage holders.
Producers could could report compensation as a monetary amount, a formula, a per-enrollee charge, or using ”any other reasonable method,” according to the draft text.
The section includes a “good faith” provision that explains what agents or brokers who have accidentally left information out or made mistakes can do to correct errors or omissions.
Other sections
The CAA 2021 also includes many other sections relevant to health insurance professionals, including health care provider cost disclosure rules, rules for encouraging employer participation in state claims payment databases, and many Medicare sections.
One Medicare “extender” provision, for example, would maintain a provision that protects some assets of a spouse who lives in the community and has a spouse who is using Medicaid to pay for nursing home care.
Another section, in Division H, encourages the Social Security Administration to do something about the Social Security Disability Insurance program claim appeal backlog.
Division H would provide $400,000 for the federal Family Caregiving Advisory Council, $2 million for the National Alzheimer’s Call Center, and $12 million for the Elder Justice and Adult Protective Services program. The agreement also includes $2 million in grants for efforts to analyze and improve state guardianship laws.
Legislative nuts and bolts
The CAA 2021 package is, officially a Senate Amendment to a House bill, H.R. 133, the “United States-Mexico Economic Partnership Act” bill, not a bill in its own right.
The House Rules Committee — a body that packages legislation for action on the House floor — met Monday to set the rules for floor consideration of CAA 2021. The version of the package text described here is the 5,593-page House Rules Committee Print 116-68 document posted on the House Rules website.
Division BB of the CAA 2021 package starts on page 4,095 of the House Rules Committee Print 116-68 PDF file.
The agent and broker comp disclosure starts on page 4,475.
A group of Republican lawmakers that includes Rep. Chip Roy, R-Texas, has asked the president to veto the package, arguing that the package is a $1.3 trillion example of “everything that is wrong with the swamp politics of Washington, D.C.”
“Particularly at a time when our federal government is spending trillions of dollars on an emergency basis, we should be doing the hard work of finding offsetting savings elsewhere,” package opponents argue.
If the president vetoed the package, Congress could vote to overturn the veto, come up with a spending measure that the president could sign, or face the prospects of much of the U.S. government suspending operations.
The president has already signed a bill that will extend funding for government operations at least through Dec. 28.