Texas restrictions on navigators hurts lower income consumers


October 9, 2013 by Tony Novak

Proposed legislation in Texas appear to be a lose/lose for lower-income consumers and health insurance navigators. It may be a win for health insurance agents. Marketwatch reports that at least one navigator that originally planned on building a cross-sales business model has called it quits on the navigator program and will market solely as producers to middle-income customers. In the end, those lower-income consumers who would have been served by the navigator grant subsidy money will lose out. Following is the text of Senate Bill 1795 from the legislature Website that shows how restrictive the political stance is in Texas at this time.

S.B. No. 1795

relating to the regulation of navigators for health benefit exchanges.
SECTION 1. Subtitle D, Title 13, Insurance Code, is amended by adding Chapter 4154 to read as follows:
Sec. 4154.001. PURPOSE. Since the State of Texas opted out of implementing a state exchange, pursuant to the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. No. 111-152), the purpose of this chapter is to provide a state solution to ensure that Texans are able to find and apply for affordable health coverage under any federally run health benefit exchange, while helping consumers in this state.
Sec. 4154.002. DEFINITIONS. In this chapter:
(1) “Health benefit exchange” means a health benefit exchange established or operated by the secretary of the United States Department of Health and Human Services under 42 U.S.C. Section 18041.
(2) “Health benefit plan issuer” means an insurance company or health maintenance organization regulated by the department and authorized to issue a health insurance policy or other health benefit plan. The term includes:
(A) a stock life, health, or accident insurance company;
(B) a mutual life, health, or accident insurance company;
(C) a stock casualty insurance company;
(D) a mutual casualty insurance company;
(E) a Lloyd’s plan;
(F) a reciprocal or interinsurance exchange;
(G) a fraternal benefit society;
(H) a stipulated premium company;
(I) a nonprofit hospital, medical, or dental service corporation, including a company subject to Chapter 842; and
(J) a health maintenance organization.
(3) “Navigator” means an individual or entity performing the activities and duties of a navigator as described by 42 U.S.C. Section 18031 or any regulation enacted under that section.
Sec. 4154.003. APPLICABILITY OF OTHER LAW. Notwithstanding Section 101.051, 101.102, 4001.051, or 4001.101 or any other law, a navigator that satisfies the requirements of this chapter may perform any duty or function authorized or required by this chapter or any applicable federal law or regulation without obtaining a license from the department or any other agency of this state.
Sec. 4154.004. EXEMPTIONS. This chapter does not apply to:
(1) a licensed life, accident, and health insurance agent;
(2) a licensed life and health insurance counselor; or
(3) a licensed life and health insurance company.
Sec. 4154.005. RULES. The commissioner shall adopt rules necessary to implement this chapter and to meet the minimum requirements of 42 U.S.C. Section 18031, including regulations.
Sec. 4154.006. EXPIRATION OF CHAPTER. This chapter expires September 1, 2017.
Sec. 4154.051. SUFFICIENCY OF FEDERAL QUALIFICATIONS. (a) The commissioner shall determine whether the standards and qualifications for navigators provided by 42 U.S.C. Section 18031 and any regulations enacted under that section are sufficient to ensure that navigators can perform the required duties, including:
(1) assisting consumers in completing the uniform application for health coverage affordability programs available through a health benefit exchange;
(2) explaining how health coverage affordability programs work and interact, including Medicaid, the children’s health insurance program, and advance premium tax credits and cost-sharing assistance;
(3) explaining health insurance concepts related to qualified health plans, including premiums, cost-sharing, networks, and essential health benefits;
(4) providing culturally and linguistically appropriate information;
(5) avoiding conflicts of interest; and
(6) establishing standards and processes relating to privacy and data security.
(b) If the commissioner determines that the standards provided by regulations enacted under 42 U.S.C. Section 18031 are insufficient to ensure that navigators can perform the required duties, the commissioner shall make a good faith effort to work in cooperation with the United States Department of Health and Human Services and to propose improvements to those standards. If after a reasonable interval the commissioner determines that the standards remain insufficient, the commissioner by rule shall establish standards and qualifications to ensure that navigators in this state can perform the required duties.
(c) At a minimum, rules adopted under this section must provide that a navigator in this state has not:
(1) had a professional license suspended or revoked;
(2) been the subject of any other disciplinary action by a financial or insurance regulator of this state, another state, or the United States; or
(3) been convicted of a felony.
(d) The commissioner shall at regular intervals obtain from the health benefit exchange a list of all navigators providing assistance in this state and, with respect to an individual, the name of the individual’s employer or organization.
(e) The commissioner may by rule establish a state registration for navigators sufficient to allow the department to ensure that navigators satisfy the standards provided by Subsection (c) and collect the information described by Subsection (d).
Sec. 4154.052. LIMITS ON ADVERTISING. A navigator may not, in any advertisement or other materials that are published or distributed in any manner by or on behalf of the navigator:
(1) indicate or suggest the professional superiority of the navigator;
(2) indicate or suggest the performance of professional service by the navigator in a superior manner; or
(3) include one or more of the following phrases in the navigator’s name or materials:
(A) “insurance advisor” or “insurance advisory”;
(B) “insurance agent” or “insurance agency”; or
(C) “insurance consultant” or “insurance counselor.”
Sec. 4154.053. CERTAIN COMPENSATION PROHIBITED. A navigator may not receive compensation for services or duties as a navigator that are prohibited by federal law, including compensation from a health benefit plan issuer.
Sec. 4154.054. ADDITIONAL TRAINING REQUIREMENTS. The commissioner shall adopt rules authorizing additional training for navigators as the commissioner considers necessary to ensure compliance with changes in state or federal law.
Sec. 4154.101. NAVIGATORS NOT LICENSED AS AGENTS. (a) Unless the navigator is licensed to act as an agent under Chapter 4054, a navigator may not:
(1) sell, solicit, or negotiate coverage under a health benefit plan;
(2) endorse a health benefit plan or group of health benefit plans;
(3) provide, or offer to provide, information or services related to insurance products not offered through a health benefit exchange;
(4) offer advice or advise consumers on which qualified health plan available through a health benefit exchange is preferable;
(5) accept any compensation that is wholly or partly dependent on whether a person enrolls in or purchases a health benefit plan; or
(6) in the course of acting as a navigator, engage in any electioneering activities or finance or otherwise support the candidacy of a person for an office in the legislative, executive, or judicial branch of state government, or of the government of the United States, or any political subdivision of this state.
(b) This section does not prohibit a navigator from providing information on public benefits and health coverage, or other information and services consistent with the mission of a navigator.
SECTION 2. This Act takes effect September 1, 2013.

______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1795 passed the Senate on April 22, 2013, by the following vote: Yeas 30, Nays 1; and that the Senate concurred in House amendment on May 24, 2013, by the following vote: Yeas 30, Nays 1.

Secretary of the Senate
I hereby certify that S.B. No. 1795 passed the House, with amendment, on May 22, 2013, by the following vote: Yeas 120, Nays 26, one present not voting.

Chief Clerk of the House




2 thoughts on “Texas restrictions on navigators hurts lower income consumers

  1. If I ignore the politics of the legislation I can surely understand the logic behind the move. Here in the New York Exchange NO ONE understands the workings of health insurance let alone understands the workings of the website. I am a broker here and trying to set up an account for my own business as an employer. I cannot even name myself as the broker. If I ask a question, I am asked to hold on while they look for a supervisor to help them.

    The bend over backwards trying to help you but they are so far over their heads right now it almost is pathetic. How can any consumer get advice or even understanding of their circumstance? Having unlicensed people sell me something does not give me any confidence that I am buying the right product.

    • Tony Novak, CPA, MBA, MT says:

      The issue as I see it is that the customers of agents/brokers are an entirely different market than the customers of navigators. If not, IMO
      , the agent needs to re-examine their marketing plan to boost income dramatically.

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