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Response: We do not see similarities between these penalties and the licensing, errors and omissions coverage, or other financial responsibility requirements that States may impose on agents and brokers as a prerequisite to performing the duties of an agent or broker. Consumer assistance entities will have no required fees or payments under this section unless they violate the Federal requirements that apply to them as described in §155.206(c). On the other hand, States may require agents and brokers to pay licensing, errors and omissions coverage, or other financial responsibilities up front before acting as a licensed agent or broker. Any CMPs assessed under this provision would be penalties for noncompliance, aimed at discouraging and rectifying violations of Federal requirements by consumer assistance entities in the FFEs, rather than financial conditions of participation in the Navigator, non-Navigator assistance personnel,
aspects of the final rule help ensure that individuals and entities are not deterred from performing consumer assistance functions in good faith, while also serving to protect members of the public from potential wrongdoing by consumer assistance entities. For example, the rule requires HHS to make individualized inquiries into the nature and consequences of each violation, and provides consumer assistance entities being investigated with the opportunity to explain the reasons behind their conduct. Further, the rule provides HHS with the opportunity to work collaboratively with entities by entering into a corrective action plan in lieu of paying a CMP, and HHS will continue to assist entities with avoiding and informally resolving any violations.
Comment: A number of commenters recommended that HHS extend the CMP provisions to cover consumer assistance entities operating in State Exchanges, work in conjunction with State Exchanges when implementing this section, or require State Exchanges to implement similar provisions. Some commenters appeared to suggest that HHS should have the ability to assess CMPs against consumer assistance entities in State Exchanges where the State fails to substantially enforce the Federal standards applicable to consumer assistance entities.
Response: Given the nature of the relationship between HHS and consumer assistance entities in FFEs, including the existence of formal agreements or grants between HHS and the FFE consumer assistance entities subject to these CMPs, and HHS’s responsibility for providing training, technical assistance, and support to consumer assistance entities in FFEs, we believe that HHS is in the best position to exercise primary enforcement authority for Federal requirements that apply to consumer assistance entities in FFEs, including State Partnership Exchanges. At this time, we are not extending the CMP provisions under §155.206 to apply to
Exchange to exercise its authority to enforce any Federal requirements applicable to these assistance programs in the State Exchange. We may take additional action in the future.
Comment: Some commenters believed that the proposed grounds for assessing CMPs in proposed §155.206(c) would not permit CMPs for violations of State Partnership Exchange rules where those rules differ from FFE rules.
Response: The CMP provisions under §155.206 are directed at consumer assistance entities that violate Federal requirements for assisters in FFEs, including assisters in State Partnership Exchanges. Under current §155.210(c)(1)(iii), as well as provisions finalized in this rulemaking at §155.215(f) and §155.225(d)(8), the consumer assistance entities subject to those regulations must meet any State licensing, certification, or other standards prescribed by the State, if applicable, so long as such standards do not prevent the application of the provisions of title I of the Affordable Care Act. Although HHS has authority under these provisions to enforce State requirements applicable to consumer assistance entities because the State requirements are incorporated into the entities’ Federal regulatory requirements, at this time we do not intend to enforce State requirements using §155.206. We believe that States are in the best position to enforce their own requirements.
Comment: We requested comment on whether CMS should have concurrent enforcement authority under the provisions of §155.206 with the HHS Office of the Inspector General (OIG), and if so, what process OIG would follow in enforcing these CMPs. The vast majority of commenters who responded to this request recommended against concurrent enforcement authority and believed that CMS is better situated than OIG to enforce CMPs for noncompliant consumer assistance entities. These commenters reasoned that because of CMS’s
relationships with consumer assistance entities, CMS would be the most effective enforcement authority and is in a better position to effectively collaborate with consumer assistance entities and pursue corrective action, when appropriate, to resolve issues that may arise. Only one commenter expressed a preference for including concurrent enforcement authority in §155.206 so that the OIG could exercise enforcement authority under appropriate circumstances.
Response: We agree with the commenters who recommended against concurrent enforcement authority that, at least initially, CMS should have sole responsibility for CMP enforcement against noncompliant consumer assistance entities under this section. CMPs assessed under this section would be penalties for programmatic violations, and we agree that CMS is in the best position to investigate and enforce its own program standards. Additionally, consumer assistance entities who provide false or fraudulent information in an Exchange application on a consumer’s behalf, or who improperly use or disclose a consumer’s personally identifiable information, might be in violation of another CMP provision finalized in this rule, 45 CFR 155.285, which provides concurrent enforcement authority for CMS and OIG. Therefore, certain consumer assistance entity violations might fall under OIG jurisdiction, when appropriate. Additionally, as we indicated in the preamble to the proposed rule, we intend to continue to work collaboratively with consumer assistance entities to address noncompliance issues before they reach the level where a CMP might be assessed. Consequently, we do not anticipate that CMS will assess a large volume of CMPs against consumer assistance entities for noncompliance with Federal requirements. However, we note that we are not foreclosing the possibility that we would pursue the addition of OIG concurrent enforcement authority for these
Comment: We also requested comments on whether we should implement an expedited process through which HHS might assess and impose CMPs if extenuating circumstances exist or if necessary to protect the public. One commenter did not believe an expedited process was necessary because the regulation as proposed contained sufficient mechanisms to prevent or address abuse by consumer assistance entities. Another commenter suggested that an expedited process should only be implemented at the request of the entity being investigated to ensure that no entity was denied adequate time to gather evidence and respond to the investigation.
Response: We agree with the commenters’ concerns. To ensure that consumer assistance entities are afforded adequate due process, we have not provided for an expedited investigative process in finalizing these provisions. Where exceptional circumstances exist, or if necessary to protect the public, HHS has the option to take swift action to address consumer assistance entity noncompliance by using remedies available pursuant to its agreements with these entities, such as the terms and conditions of Federal Navigator grants, agreements with Enrollment Assistance Program entities that provide non-Navigator in-person assistance, or agreements between HHS and certified application counselor designated organizations. If the circumstances warrant, we also will consider referring cases to appropriate law enforcement officials. Additionally, as we noted in the preamble to the proposed rule, we intend to continue to work collaboratively with consumer assistance individuals and entities to prevent noncompliance issues and address any problems that arise before they reach the level where CMPs might be assessed.
Comment: Many commenters supported HHS’s intention to prioritize the use of alternative remedies over assessment of CMPs. A large number of commenters strongly
plan to correct the violation instead of paying a CMP. Some recommended that HHS require these entities to participate in a corrective action plan before assessing a CMP.
Response: We agree that alternative remedies should be used where appropriate, and we have crafted this provision to include flexibility for HHS to help prevent and resolve noncompliance issues in lieu of collecting a CMP. However, we do not believe that requiring corrective action plans from consumer assistance entities will be a suitable response to every instance of noncompliance. For example, if a consumer assistance entity’s conduct is so egregious that in order to protect the public we have terminated our relationship with the entity pursuant to our agreement or contract with the entity, a corrective action plan may not be appropriate. Therefore, we are finalizing §155.206(a) as proposed.
Comment: We requested comment on whether all of the consumer assistance individuals and entities listed in proposed §155.206(b) should be subject to CMPs, and on whether other entities and individuals should be added to that list. Many commenters supported the inclusion of Navigator individuals and organizations, non-Navigator assistance personnel and entities, and certified application counselor designated organizations and individual certified application counselors operating in an FFE, as proposed. Several commenters recommended that volunteers serving as Navigators, non-Navigator assistance personnel, or certified application counselors should be exempt from CMPs under this section. One commenter argued that the Volunteer Protection Act protects volunteer certified application counselors from liability under this section. Another commenter suggested that Exchange employees should also be subject to CMPs.
Response: We believe that the consumer protection interests that are served by the CMP
providing application assistance. The application of the Volunteer Protection Act of 1997 to CMPs assessed against volunteers of Navigator, non-Navigator assistance, or certified application counselor organizations would be examined by courts or other reviewing entities on a case-by-case basis. We further clarify that no Navigators, non-Navigator assistance personnel, or certified application counselors in the FFEs would be volunteers for the Federal government because the consumer assistance entities with which they are affiliated provide services to the public, not to the Federal government.
While we will monitor the activities of FFE employees carefully and reserve the right to add them to this rule in the future, we do not believe it is necessary to extend these penalties to FFE employees at this time, because in our view, the range of employment-based remedies available to the FFE provides adequate enforcement authority in the event of employee misconduct. In addition, FFE employees might be subject to CMPs under §155.285 if they provide false or fraudulent information in an Exchange application or misuse consumers’ personally identifiable information. We are finalizing §155.206(b) as proposed.
Comment: Many commenters addressed our proposed grounds for assessing CMPs at §155.206(c). Some commenters worried that the proposed grounds for assessing penalties were stated too broadly, and did not provide adequate notice to consumer assistance entities and personnel regarding the specific requirements and standards that would apply when a determination is made as to whether a CMP should be assessed for noncompliance. These commenters recommended that we specify the statutory and regulatory requirements with which consumer assistance entities and personnel must comply to avoid potential CMPs, and various commenters suggested that these might include the regulatory requirements specific to consumer
nondiscrimination requirements at 42 U.S.C. 18116, 45 CFR 155.105(f), and 155.120(c); and the Affordable Care Act requirements on health insurance consumer information at 42 U.S.C.
300gg-93, and affordable choices of health benefit plans at 42 U.S.C. 18031.
Response: We agree that more specificity regarding the FFE requirements and standards that, if violated, might trigger CMPs under this section would help provide adequate notice to consumer assistance entities and help prevent inadvertent violations of those standards.
Therefore, we have modified §155.206(c) to make more clear that the requirements and standards applicable to consumer assistance entities under this section refer to the Federal regulatory requirements applicable to consumer assistance entities that have been promulgated by the Secretary pursuant to section 1321(a)(1) of the Affordable Care Act, as well as the terms of any agreements, contracts, and grant terms and conditions between the consumer assistance entity and HHS, to the extent that these documents interpret those Federal regulatory requirements or set forth procedures for compliance with them. We note that HHS has authority to assess CMPs under section 1321(c)(2) of the Affordable Care Act only to enforce requirements that the Secretary establishes under section 1321(a)(1) of the Affordable Care Act.
Therefore, Federal requirements that have not been established pursuant to section 1321(a)(1) of the Affordable Care Act could not be enforced pursuant to this section.
We have not included in the final rule a more specific list of the requirements that could be enforced under this section because we anticipate that these may change over time. However, we anticipate that any list of such requirements would include, but not be limited to, the requirements specific to consumer assistance entities at 45 CFR 155.205(c)-(e), 155.210, 155.215, and 155.225; the Exchange nondiscrimination requirements at 45 CFR 155.105(f) and