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The Secretary, under the authority of sections 1311(i) and 1321(a)(1) of the Affordable Care Act, has previously established a range of consumer assistance programs to help consumers apply for and enroll in QHPs and insurance affordability programs through the Exchange. These consumer assistance programs include the Navigator program described at section 1311(i) of the Affordable Care Act and 45 CFR 155.210; the consumer assistance, outreach, and education functions authorized by section 1321(a)(1) of the Affordable Care Act and established at 45 CFR 155.205(d) and (e), which can include a non-Navigator assistance personnel program; and the certified application counselor program authorized by section 1321(a)(1) of the Affordable Care Act and set forth at 45 CFR 155.225. Under these authorities and the authority granted to the Secretary by section 1321(c)(1) of the Affordable Care Act, the FFE has implemented a Navigator and certified application counselor program in all States that did not elect to establish an Exchange, and has implemented a non-Navigator assistance program in some of those States through an enrollment assistance contract.
Under section 1321(c)(2) of the Affordable Care Act, the provisions of section 2723(b) of the PHS Act21 apply to the Secretary’s enforcement, under section 1321(c)(1) of the Affordable Care Act, of the standards established by the Secretary under section 1321(a)(1) of the Affordable Care Act for meeting the requirements under title I of the Affordable Care Act, including the establishment and operation of Exchanges, without regard to any limitation on the
application of the provisions of section 2723(b) of the PHS Act to group health plans. Section 2723(b) of the PHS Act provides the Secretary with authority to assess CMPs against health insurance issuers that fail to meet certain Federal requirements set forth in the PHS Act that apply to group health plans, in circumstances where, in the Secretary’s determination, the State that regulates the issuer has failed to “substantially enforce” those requirements. We interpret the cross-reference to section 2723(b) of the PHS Act in section 1321(c)(2) of the Affordable Care Act as providing the Secretary with authority to assess CMPs to enforce requirements established under section 1321(a)(1) of the Affordable Care Act against any entity subject to those requirements, under circumstances where the Secretary is exercising her authority under section 1321(c)(1) of the Affordable Care Act. For purposes of this final rule, we would consider that any State that has not elected to establish an Exchange, and in which the Secretary has therefore had to establish and operate an Exchange under section 1321(c)(1), is not “substantially enforcing” the requirements related to Exchanges that the Secretary has established under section 1321(a)(1).
Accordingly, HHS has the authority under section 1321(c)(2) of the Affordable Care Act to assess CMPs against Navigators, non-Navigator assistance personnel, and certified application counselors and certified application counselor designated organizations in FFEs, including State Partnership Exchanges, for violations of the requirements of the Navigator, non-Navigator, and certified application counselor programs that the Secretary established under section 1321(a)(1) of the Affordable Care Act. This rule sets forth the circumstances under which the Secretary would exercise this authority, and is based on the enforcement scheme laid out in section 2723(b)
In §155.206(a), we proposed to establish the scope and purpose of the CMP provisions and explained when and against whom HHS would assess a CMP under this rule.
At §155.206(a)(2), we proposed that HHS could permit an entity or individual to whom it has issued a notice of assessment of CMP to enter into a corrective action plan instead of paying the CMP.
We specified that permitting an entity to enter into a corrective action plan would not limit HHS’s authority to require payment of the assessed CMP if the corrective action plan is not followed. We explained that this approach would allow us not only to penalize violations if necessary, but also to prioritize working collaboratively with consumer assistance entities to ensure that improvements are made and future violations are prevented. We also explained that this approach would be consistent with the limitation on imposing CMPs that is set forth at PHS Act section 2723(b)(2)(C)(iii)(II).
We requested comments on whether we should provide for an expedited process through which HHS may assess and impose CMPs, if extenuating circumstances exist or if necessary to protect the public. We also considered implementing an approach that would give the HHS Office of Inspector General (OIG) concurrent authority with CMS to enforce violations under this section, and we requested comments on such an approach and how it might be structured.
In §155.206(b), we proposed that the individuals and entities who would be subject to HHS’ enforcement authority under this proposal would include the following entities in FFEs, including in State Partnership Exchanges: Navigators, non-Navigator assistance personnel (also referred to as in-person assistance personnel) authorized under §155.
205(d) and (e), and certified application counselors and organizations designated as certified application counselor organizations. We explained that we refer to these individuals and entities as “consumer
requested comment on whether all of the individuals and entities listed in proposed §155.205(b) should be subject to CMPs, and on whether other entities and individuals should be added to that list.
In §155.206(c), we proposed the grounds on which HHS could assess CMPs on the entities and individuals specified in §155.
206(b). Section 1321(c)(2) of the Affordable Care Act authorizes the Secretary to enforce the requirements of section 1321(a)(1) of the Affordable Care Act, which include the requirements established by the Secretary regarding Exchange consumer assistance functions. This statutory provision authorizes HHS to assess a CMP or, in lieu of a CMP, a corrective action plan against Navigators, non-Navigator assistance personnel, certified application counselors, and certified application counselor organizations in FFEs if HHS determines that these individuals or entities are not in compliance with the Exchange standards applicable to them. We proposed that these Exchange standards would include any applicable regulations implemented under title I of the Affordable Care Act, as interpreted through applicable HHS guidance, such as the regulations governing consumer assistance tools and programs of an Exchange at §155.205; those governing Navigators at §155.210 and Navigators in FFEs at §155.215; those governing certified application counselors at §155.225; and those under §155.215 governing non-Navigator assistance personnel in FFEs; as well as any applicable HHS guidance interpreting an existing regulatory or statutory provision.
We note that §155.285 of this final rule extends CMPs to consumer assistance entities who misuse or impermissibly disclose personally identifiable information in violation of section 1411 of the Affordable Care Act. Therefore, we have not addressed penalties for those actions here. That section also extends CMPs to anyone providing false or fraudulent information on an
CMPs under either §155.285 or §155.206, and in such cases we believe HHS has discretion to determine whether to assess a CMP under this regulation or under §155.285 of this subpart.
However, we proposed in §155.206(c) that HHS would not assess a CMP under this section if a CMP has already been assessed for the same conduct under §155.285.
In §155.206(d), we proposed the basis for initiating an investigation of a potential violation.
We proposed that HHS could initiate an investigation based on any information it receives indicating that a consumer assistance entity might be in noncompliance with applicable Exchange standards.
In §155.206(e), (f) and (g), we proposed the process that HHS would follow to investigate potential violations in order to determine whether the consumer assistance entity has engaged in noncompliance of applicable Exchange standards.
Under §155.206(e), we proposed that if HHS learns of a potential violation through the means described in paragraph (d) in this section and determines that further investigation is warranted, HHS would provide written notice of its investigation to the consumer assistance entity. Such notice would describe the potential violation, provide 30 days from the date of the notice for the consumer assistance entity to respond and provide HHS with information and documents, including information and documents to refute an alleged violation, and would state that a CMP might be assessed if the consumer assistance entity fails to refute the allegations in HHS’ determination.
In §155.206(f), we proposed a process for a consumer assistance entity to request an extension from HHS when the entity cannot prepare a response to HHS’s notice of investigation within the 30 days provided in the notice.
We proposed that if HHS granted the extension, the responsible entity would be required to respond to the notice of investigation within the time
days, or within the extended time frame, could result in HHS’s imposition of the CMP that would apply based upon HHS’s initial determination of a potential violation as set forth in the notice of investigation under §155.206(e).
In §155.206(g), we proposed that HHS could review and consider documents or information received or collected in accordance with paragraph (d)(1) of this section or provided by the consumer assistance entity in response to receiving a notice in accordance with paragraph (e)(2) of this section.
We also proposed that HHS may conduct an independent investigation into the alleged violation, which may include site visits and interviews, if applicable, and may consider the results of this investigation in its determination.
In §155.206(h), we proposed the factors that HHS would use to determine the appropriate CMP amount, and to determine whether it would be appropriate to offer the entity or individual an opportunity to enter into a corrective action plan in place of the CMP.
These proposed factors included HHS’s assessment of the consumer assistance entity’s previous or ongoing record of compliance; the gravity of the violation, as determined in part by the frequency of the violation and the financial harm incurred by a consumer; and the culpability of the consumer assistance entity, as determined, in part, by whether the entity received payment for committing the violation.
Section 2723(b)(2)(C)(i) of the PHS Act limits the amount of CMPs authorized under section 1321(c)(2) of the Affordable Care Act to $100 for each day for each individual directly affected. Therefore in §155.206(i), we proposed that the maximum daily amount of penalty assessed for each violation would be $100 for each day, for each consumer assistance entity, for each individual directly affected by the entity’s non-compliance. We also proposed that,
determine the number of individuals directly affected, HHS may reasonably estimate this number based on available information, such as data from an FFE Navigator grantee’s quarterly or weekly report concerning the number of consumers assisted. We requested comment on whether we should implement a cap on the total penalty that could be assessed by HHS.
In proposed §155.206(j), we proposed that nothing in this section would limit HHS’s authority to settle any issue or case described in the notice furnished in accordance with paragraph (e), or to compromise on any CMP provided for in this section.
Section 2723(b)(2)(C)(iii) of the PHS Act places certain limitations on CMPs authorized under section 1321(c)(2) of the Affordable Care Act, including the limitation that HHS will not assess a CMP where the entity did not know, or exercising reasonable diligence would not have known, of the violation. We proposed to implement these limitations in §155.206(k). We also proposed, based on the HIPAA enforcement structure at 45 CFR 150.341, that the burden is on the consumer assistance entity to establish that the circumstances triggering these limitations existed.
In §155.206(l), we proposed standards for notifying consumer assistance entities of the intent to assess a CMP, which notice would include an explanation of the entity’s right to an appeal pursuant to the process set forth at 45 CFR Part 150, Subpart D, as provided in proposed §155.
206(m). We sought comment on whether all aspects of that process should be applicable to appeals of these CMPs. Finally, in §155.205(n), we proposed that HHS may require payment of the proposed CMP if the consumer assistance entity does not timely request a hearing.
We also requested comment on whether other provisions of 45 CFR Part 150 should be
limitations period should apply, and if so, what limitations period would be appropriate for violations of applicable Exchange standards by consumer assistance entities in FFEs.
Comment: We received many comments in support of the proposed CMP provisions under §155.206. Some commenters expressed appreciation that the proposed rule struck a balance between holding consumer assistance entities accountable and protecting the public from wrongdoing, on the one hand, while not being overly punitive, on the other. A few commenters were concerned that the threat of CMPs might discourage participation in the Navigator, nonNavigator assistance personnel, or certified application counselor programs. Some commenters expressed concern that CMPs for violations of consumer assistance entity requirements would be an extreme response to such noncompliance, and one commenter expressed the view that the imposition of financial responsibility on consumer assistance entities muddies the distinction between these entities and agents and brokers.