Benefits and Compensation

Stop-Loss Insurers Would Not Be Health Exchange ‘Navigators’ Under HHS Proposal

The health reform law provides that entities called “Navigators” will assist consumers and small businesses in researching health insurance exchanges — but stop-loss insurers for self-funded health plans won’t be one of them. Those insurers, as well as individuals and other entities with too close a financial relationship to such insurers, would be excluded from being Navigators under proposed rules issued April 4 from the U.S. Department of Health and Human Services (78 Fed. Reg. 20581). The agency said Navigators must be “fair and impartial,” and stop-loss insurers would have a financial incentive to encourage small employers to self-fund.


Under the Patient Protection and Affordable Care Act, individuals and small businesses will be able to purchase health insurance through affordable insurance exchanges ( also known as the health insurance marketplaces). States can establish such exchanges; federally facilitated exchanges will exist for states that choose not to operate an exchange or won’t have one operational by Jan. 1, 2014.

Consumers can receive assistance from a variety of sources when seeking access to exchange coverage. Under the reform law and its exchanges regulations, exchanges are to give grants to “Navigators” that are to provide “fair and impartial” information to consumers about health insurance and the exchanges.

Navigators are not to not make eligibility determinations and will not select  plans for consumers or enroll applicants. They will, however, help consumers through the eligibility and enrollment process. HHS said in the preamble:

Exchanges also are to perform certain consumer service functions through a “non-Navigator consumer assistance program.” State-based exchanges may, but are not required to establish such a program, however.

The reform law directed HHS to establish standards for Navigators, to include certification, licensure training and the avoidance of conflict of interest. The proposed rules provide details on these standards and build upon the conflict of interest provision by excluding stop-loss insurers, as explained below.

Stop-loss Insurers Excluded from Definition of Navigator

Generally, the health reform law provided that Navigators are not to be  health insurance issuers or related entities, or receive direct or indirect compensation from any issuer in connection with the enrollment in an exchange plan.

The proposed rules would take this a step further by applying this exclusion to stop-loss insurers or their subsidiaries.

In HHS’ view, a Navigator must distribute fair and impartial information on QHP enrollment and must not have conflict of interest when presenting information on coverage choices. However, Navigators affiliated with stop-loss insurers could have “a financial incentive to encourage small employers towards self-funding and might not present all coverage options, including insured options, to small employers.”

Entities that do meet the criteria of Navigator would have to follow conflict-of-interest standards that would require them to disclose any interaction with health insurance issuers and stop-loss insurers.

“These types of conflict-of-interest relationships with issuers of health insurance or stop loss insurance should be disclosed because these relationships may confer benefits or indirect financial gain that would compromise a Navigator’s objectivity,” according to HHS.

The rules noted that agents and brokers could operate as Navigators as long as they could satisfy the standards — to include being prohibited from receiving compensation from stop loss insurers. Such a prohibition would apply to the entire organization and staff.

More details on this and other health reform compliance issues can be found at