Health Insurance Broker Compensation Disclosures Coming In 2022 | Manatt, Phelps & Phillips, srl
The Consolidated Appropriations Act 2021 (CAA) made dozens of changes to healthcare regulation, including a historic ban on surprise medical billing. The new compensation disclosure requirements for health insurance brokers that will be required starting in 2022 have been easily overlooked.
The Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments), along with the Office of Personnel Management, have issued proposed rules that require issuers of individual health insurance and insurance short-term limited time to disclose to applicants and policyholders the commissions that insurance agents and brokers earn for the sale of coverage. Information on actual commissions paid would be reported to HHS. This appears to be designed to highlight how broker compensation might encourage the sale of short-term, limited-term insurance, which is exempt from most federal health insurance laws.
The Department of Labor has not issued guidance on a supplemental CAA provision that added a requirement to the Employees Retirement Income Security Act of 1974 (ERISA) to require certain pension plan service providers to collective health disclose information on the compensation paid to providers to the plan sponsor. in the context of brokerage or advisory services.
Comments on the proposed rules are expected on October 18, and the HHS is expected to finalize the rules in the fall, as at least some of those provisions become applicable on December 27, 2021. The proposed rules also include unrelated provisions on requirements. and enforcement of air ambulance reports. provisions of the CAA.
The proposed rules would require that information on brokerage commissions be provided to applicants before their choice of plan is finalized and, in addition, as part of their initial registration confirmation package (or similar documents) and upon completion of their plan. renewal of the plan. The HHS is also proposing to require health insurance issuers to report to it the actual compensation they paid brokers and agents over the previous year for individual market listings and short-term coverage and limited time.