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PPACA's New Medical Loss Ratio Rules: Trouble for Group Agent Compensation?

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After speaking with Dave Harvey of the International Foundation of Employee Benefit Plans about the health care reform legislation’s treatment of medical loss ratio rules on group plans, I wonder: Will the market simply adjust? He compared it with the travel industry of just a few years ago:

“I think theres probably going to be some changes as far as how agents are compensated with the loss ratio requirements and what have you, but thats more of an evolutionary than a revolutionary aspect of health care reform,” said Harvey. “Its sort of like, if you remember a few years ago, travel agents were largely paid by commissions payable by airlines on tickets, then they said, ‘Were not paying on commission anymore.’ Travel agents figured out there was a way they could charge fees. I think we will see the same thing evolving in the insurance broker market if remuneration gets changed. Agents will adapt to it in any number of ways, but I dont think an analogy in terms of travel agencies is that far removed.”

We spoke with Harvey about Agent Media’s 2010 Employee Benefits Market Study (Agent Media is the publisher of the Agent’s Sales Journal). The IFEBP helped come up with many of the questions on the study, which is intended to help us take a closer look at the way that group and voluntary benefits producers are grappling with changes that are already here and those yet to come. For a look at where we were last year, you can check out the 2009 Employee Benefits Market Study.

We’ll be taking a closer look at the results of the 2010 study in August, but until then, we want to hear from you. How do you see the market reacting to changes in the MLR rules? And what other aspects of health care reform do you think will effect your group and/or voluntary benefits business? Leave us a comment below.


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