Last Friday, the U.S. Court of Appeals for the 8th Circuit issued a much-anticipated ruling affirming the broad authority of states to license and regulate health insurance exchange navigators, certified application counselors and other assisters.
Last Friday, the U.S. Court of Appeals for the 8th Circuit issued a much-anticipated ruling connected to the Affordable Care Act (ACA) that affirms the broad authority of states to license and regulate health insurance exchange navigators, certified application counselors and other assisters. The ruling overturned a lower court order and was a victory for proponents of state insurance regulation.
St. Louis Effort for AIDS v. Huff arose when a number of self-described consumer organizations challenged a Missouri law that created a state-level regulatory framework for insurance navigators and exchange-related assisters. Missouri and many other states enacted similar navigator and assister-specific statutes following the passage of the ACA to fill the regulatory void that might otherwise exist and to make clear that these entities are subject to the jurisdiction of state officials. The plaintiffs argued that the ACA largely preempted the Missouri law.
In January 2014, the federal district court that first considered the lawsuit issued a preliminary injunction that prevented the state from implementing the law. The judge suggested that jurisdictions with federal exchanges have no authority to license or oversee navigators and similar assisters and went so far as to say that “any attempt by Missouri to regulate the conduct of those working on behalf of the [federal health insurance exchange] is preempted.” Some consumer groups and others argued the order threatened the existence of similar statutes in other states, and the independent agent community and other supporters of state insurance regulation welcomed the state’s decision to appeal the troubling decision.
In last week’s opinion, the 8th Circuit tossed aside most elements of the district court’s sweeping injunctive order and concluded that all states—including those with federally operated exchanges—may indeed license, certify and regulate navigators and assisters. The court observed that the applicable ACA preemption provision is a "narrow one" and found that the “district court ignored [the ACA’s] limited preemptive effect” when issuing its order.
The appeals court’s decision was not an absolute victory, and the three-judge panel suggested that federal law likely preempts three of the Missouri law’s provisions. As enacted by the Missouri General Assembly, the three substantive provisions would 1) prohibit navigators and application counselors from providing advice concerning the benefits, terms and features of particular health plans; 2) prohibit navigators and application counselors from giving information or services related to plans or products not offered on the exchange; and 3) require navigators and application counselors, upon contact with a person who has existing coverage, to advise that person to consult with a licensed insurance producer. The case now returns to the district court level for further consideration, and the State of Missouri is prevented from implementing and enforcing these three particular requirements in meantime.
Securing this positive result at the appellate level was a priority for both the state and national Big “I” associations. With assistance from national, the Missouri Association of Insurance Agents played an active role in the appellate court’s review of these issues, and that organization submitted two amicus briefs to the court and participated in the oral arguments that occurred three months ago. The Big “I” Agents Advocacy Fund also provided the state association with $20,000 to assist with the defense of the law and states insurance regulation.
Wes Bissett is Big “I” outside senior counsel of government affairs.
