The Consolidated Appropriations Act, 2021 (CAA), made dozens of changes to health care regulation, including a landmark ban on surprise medical billing. Easily overlooked were new compensation disclosure requirements related to health insurance brokers that will be required beginning in 2022.

The Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments), with the Office of Personnel Management, have released proposed rules that require issuers of individual health insurance coverage and short-term, limited-duration insurance to disclose to applicants and policyholders the commissions that insurance agents and brokers earn for selling the coverage. Information on commissions actually paid would be reported to HHS. This appears to be designed to bring to light how broker compensation could be encouraging the sale of short-term, limited-duration insurance, which is exempt from most federal health insurance laws.

The Department of Labor has not issued guidance on a companion CAA provision that added a requirement to the Employee Retirement Income Security Act of 1974 (ERISA) to require certain group health plan service providers to disclose to the plan sponsor information about compensation paid to the providers in connection with brokerage or consulting services.

Comments on the proposed rules are due October 18, and HHS is expected to finalize the rules in the fall because at least some of these provisions become applicable on December 27, 2021. The proposed rules also include unrelated provisions on air ambulance reporting requirements and enforcement of CAA provisions.

The proposed rules would require that broker commission information be provided to applicants before their plan selection is finalized and, in addition, as part of their initial enrollment confirmation package (or similar documentation) and at plan renewal. HHS is also proposing to require that health insurance issuers report to HHS the actual compensation they paid brokers and agents in the prior year for enrollments in individual market and short-term, limited-duration coverage.