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Eighth Circuit Rules States Have Right to Regulate Navigators

Following passage of the Affordable Care Act, the majority of states, including Missouri, opted to allow the federal government to establish a health care exchange in their state...
April 17, 2015

Following passage of the Affordable Care Act (ACA), the majority of states, including Missouri, opted to allow the federal government to establish a health care exchange in their state. The Missouri State Legislature, at that time, also passed the Health Insurance Marketplace Innovation Act (HIMIA) to regulate federal navigators. HIMIA is supported by the PIA-affiliated Missouri Association of Insurance Agents (MAIA) and by PIA.

Some groups opposed passage of HIMIA and brought a court challenge against the law. Last year, a federal district court enjoined HIMIA from taking effect, finding that any attempt by states to regulate navigators was preempted by the ACA. Meanwhile, MAIA filed an amicus brief with the Court of Appeals for the Eighth Circuit in support of overturning the preliminary injunction. PIA National supported MAIA in the challenge.

On April 10, the Eighth Circuit Court of Appeals found that the lower court ignored the narrow preemption language of the ACA and only those state laws that directly hinder or impede the implementation of the ACA are preempted by federal law.

In finding that states can regulate Navigators, the Appeals Court found that three provisions of HIMIA are likely to be preempted. However, the Appeals Court lifted the injunction on the remainder of HIMIA, allowing the Missouri Department of Insurance to regulate navigators. Provisions of HIMA upheld include a prohibition against navigators engaging "in any activity that would require an insurance producer license" and prohibit navigators from recommending or endorsing a particular health plan or advising consumers about which health plan to choose.

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