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Therefore, we do not think it is necessary to place a maximum on such an estimate based on the size of the population assisted by the entity. In addition, we have not included a requirement that would toll the maximum penalty from accruing while HHS conducts its investigation because of the possibility that consumers may continue to be affected by previous misconduct during this period, even if the entity has stopped the behavior at issue. However, under §155.206(k)(1)(ii), HHS cannot assess penalties for any period of time after a consumer assistance entity knew, or exercising reasonable diligence would have known, of the failure, if the violation was due to reasonable cause and not due to willful neglect and the violation was corrected within 30 days of the first day that any of the consumer assistance entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that the violation existed.
Additionally, HHS may consider a consumer assistance entity’s cessation of misconduct when determining whether penalties should be assessed and in what amount, under §155.206(h)(2)(ii).
Taken together, we believe these factors strike the right balance to ensure that any CMPs assessed by HHS are reasonable and appropriate.
Comment: We requested comment on whether we should provide a cap on the total penalty that could be assessed by HHS in addition to the maximum per day penalty. The
aggregate cap. These commenters were concerned that the lack of such a cap might chill participation, particularly for those organizations with fewer resources, and might unduly penalize consumer assistance entities for mistakes made due to lack of sophistication or confusion during the initial open enrollment period. A few commenters recommended against implementing an aggregate penalty cap because the cost-benefit of CMPs for certain violations might not serve as an adequate deterrent. One commenter recommended a tiered system of caps based on the time frame of the violation.
Response: We agree with commenters that if we were to set an aggregate cap for CMPs assessed against a consumer assistance entity, CMPs might not serve as a sufficient deterrent for certain types of misconduct or noncompliance. Therefore, we are finalizing §155.206(i) as proposed. However, we have modified the text of §155.206(h) to make clear that, as was discussed in the preamble to the proposed rule, the factors listed are to be used not just to determine whether CMPs are warranted under the circumstances surrounding the violation, but also to determine the amount of any CMPs assessed. We believe this change will help HHS ensure that the amount of any penalty assessed is in proportion to the consumer assistance entity’s violation.
Comment: One commenter suggested that the CMPs collected by HHS related to consumer harm should be distributed to consumers as restitution.
Response: Section 2723(b)(2)(G) of the PHS Act states that penalties collected under paragraph (b) of that Act must be “expended for the purpose of enforcing the provisions with respect to which the penalty was imposed.” HHS does not interpret restitution to consumers to
to consumers. Accordingly, we do not provide for consumer restitution as an alternative use of CMPs collected under this authority.
Comment: One commenter expressed support for our proposal in §155.206(j) that HHS retain authority to settle or compromise on any penalties provided for in this section.
Response: We agree that HHS should have the flexibility to settle or compromise on any penalties that could be collected. We are therefore finalizing §155.206(j) as proposed.
Comment: Many commenters supported our proposal in §155.206(k) to implement the limitations that HHS will not assess a CMP where the entity did not know, or exercising reasonable diligence would not have known, of the violation; or for any period of time after a consumer assistance entity knew, or exercising reasonable diligence would have known, of the failure, if the violation was due to reasonable cause and not due to willful neglect and the violation was corrected within 30 days of the first day that any of the consumer assistance entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that the violation existed. Some commenters expressed that these limitations would help encourage a broader group of organizations with varying degrees of experience to participate as consumer assistance entities, and ensure that CMPs are reserved for the most egregious offenses. Several commenters also supported our proposal to place the burden on demonstrating the existence of the factors that trigger these limitations on the consumer assistance entity.
Response: We agree with these comments, and are finalizing §155.206(k)(1) and (2) as proposed. We believe these limitations will help balance the interests of HHS, the Exchange,
understanding and executing their obligations, while not unnecessarily penalizing consumer assistance entities who are acting in good faith.
Comment: We requested comment on whether a statute of limitations should apply to actions under this section. One commenter responded to this request, suggesting that a statute of limitations period would be appropriate and recommending a period of 5 years.
Response: We agree that a statute of limitations period is appropriate. We believe such a period will help give assurance to consumer assistance entities that any violations will not be actionable indefinitely, particularly since we understand that some commenters are concerned about the potential for these penalties to discourage program participation. Additionally, HHS’s goals in issuing this CMP rule are to encourage program compliance, prevent misconduct, and remedy violations promptly. We do not think these goals will be served by prosecuting violations many years after they have occurred.
The regulations finalized elsewhere in this rulemaking at §155.285 regarding application fraud and misuse of PII have adopted a six-year statute of limitations following the date of the occurrence. We believe that consistency with §155.285 regarding the statute of limitations period is important because the same conduct by a consumer assistance entity in an FFE might trigger CMPs under either that provision or under §155.206. Additionally, we believe that six years provides ample time for HHS to discover, investigate, and assess any potential CMP against a consumer assistance entity. We have therefore added a new §155.206(k)(3) to provide for a six-year statute of limitations period.
Comment: We requested comment on whether all aspects of 45 CFR Part 150, Subpart D should apply to appeals of CMPs assessed under §155.206. No commenters responded to this
recommended that CMPs should continue to accrue pending an appeal in the event the imposition of CMPs is upheld on appeal and the Exchange participant failed to correct the instance of noncompliance following the imposition.
Response: We are finalizing §155.206(m)-(n) as proposed. We do not believe it is necessary to provide that CMPs should continue to accrue pending appeal. If HHS receives or learns of any information indicating that a consumer assistance entity may have engaged or may be engaging in noncompliant activity in violation of §155.206(c), including any violation for the period following an initial assessment, such as the period during which an appeal is pending, HHS could initiate a new investigation and assess new CMPs as appropriate.
Comment: Several commenters agreed with our proposal that where conduct by consumer assistance entities may warrant CMPs under either §155.285 or §155.206, HHS has discretion to determine whether to assess a CMP under §155.285 or under §155.206. Other commenters recommended that consumer assistance entities be exempt from penalties under §155.285. A few argued that consumer assistance entities do not actually provide information as part of the process of applying for coverage or an exemption, and therefore it was difficult to see how they could provide false or fraudulent information in violation of section 1411(b) of the Affordable Care Act.
Response: We disagree that consumer assistance entities should be exempt from the provisions of §155.285. Any Navigator, non-Navigator assistance personnel, or certified application counselor who misuses consumer information in violation of section 1411(g) of the Affordable Care Act, or who knowingly enters false or fraudulent information in a consumer’s application with or without the knowledge of the consumer, might be in violation of either
entity may warrant CMPs under either §155.285 or §155.206, HHS should have discretion to determine whether to assess a CMP under §155.285 or under §155.206. We have also finalized the portion of §155.206(c) that indicates that HHS will not assess a CMP under §155.206 if a CMP has been assessed for the same conduct under §155.285. If a consumer assistance entity is in a situation where CMPs could be imposed under both §155.285 and §155.206, when determining whether to assess CMPs under §155.285, HHS will take the possibility that it may be penalizing conduct that is being investigated or has already been penalized under §155.206 into account as a factor under §155.285(b)(1)(viii).
Summary of Regulatory Changes We are finalizing the provisions proposed in §155.206 of the proposed rule, with the following modifications. We modified proposed §155.206(c) to more clearly explain that HHS could assess a CMP against a consumer assistance entity for failure to comply with the Federal regulatory requirements applicable to the consumer assistance entity that have been implemented pursuant to section 1321(a)(1) of the Affordable Care Act, including provisions of any agreements, contracts, and grant terms and conditions that interpret those Federal regulatory requirements or establish procedures for compliance with them. We added language to final §155.206(d)(1), to specify that information learned, not just received, by HHS indicating that a consumer assistance entity may have engaged or may be engaging in activity specified in paragraph (c) may warrant an investigation. We modified §155.206(d)(1)(iii) to align with language elsewhere in this section that HHS may consider information “that a consumer assistance entity may have engaged or may be engaging” in noncompliance under §155.206(c), rather than information concerning “potential involvement” in such activity. We revised
its investigation, rather than requiring HHS to provide a written notice to an entity each time HHS learns of a potential violation. We revised §155.206(h) to clarify that, consistent with the preamble discussion of the proposed rule, the factors listed are to be used not just to determine whether CMPs are warranted, but also to determine the amount of any CMPs assessed. In §155.206(h)(1)(i), we removed the erroneous reference to corrective action plans “under section (c) of this section.” We also included a new factor at §155.206(h)(2)(iii) that allows HHS to take into consideration whether other remedies or penalties have been assessed and/or imposed for the same conduct or occurrence, and adjusted the numbering of the final factor (“Other such factors as justice may require”) from §155.206(h)(2)(iii) to §155.206(h)(2)(iv). In §155.206(i), we changed “the Exchange” to “HHS” for consistency with the rest of the section. We added new §155.206(k)(3) to provide for a six-year statute of limitations period. We corrected some numbering errors throughout §155.206(l). We also made several minor wording changes throughout final §155.206, to replace “Federally-facilitated Exchanges” with “a Federallyfacilitated Exchange” and to use the abbreviation “CMP” consistently.
b. Navigator, Non-Navigator Assistance Personnel, and Certified Application Counselor Program Standards (§§155.210, 155.215, and 155.225)
1. Provisions Related to Non-Federal Requirements for Navigators, Non-Navigator Assistance Personnel, and Certified Application Counselors (§§155.210, 155.215, and 155.225) In the proposed rule, we proposed amending §155.210(c)(1)(iii) to add new paragraphs (A) through (F) to specify a non-exhaustive list of certain non-Federal requirements that would prevent the application of the provisions of title I of the Affordable Care Act within the meaning of section 1321(d) of the Affordable Care Act, with respect to the Navigator program. We also