The National Association of Health Underwriters (NAHU) will be asking Congress to change the medical loss ratio (MLR) formula in the interim regulations released Monday by the U.S. Department of Health and Human Services (HHS).

HHS released interim final minimum MLR provision regulations Monday.

The regulations will guide implementation of provisions in the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), that will require 85% of large group revenue and 80% of individual and small group revenue to be spent on patient care and quality improvement efforts.

The provisions are set to take effect Jan. 1, 2011.

Health insurance agents and brokers want to HHS to classify producer commissions as a medical expense or else leave them out of MLR calculations altogether. Producers say a commission “pass through” provision makes sense, because insurers simply collect commissions from the true payers of the commissions – customers – and pass the commission on to the producers.

Officials at NAHU, Arlington, Va., looked quickly at the 308-page batch of regulations when they were released and suggested that agents and brokers might be able to live with the regulations. The regulations include a provision allowing officials to adjust the MLR rules if they appear to be disrupting a state’s individual health insurance market, especially between now and 2014, when a new, subsidized individual health insurance system is supposed to open its doors.

NAHU Chief Executive Janet Trautwein nowTrautwein says NAHU is disappointed with the MLR regulations.

“NAHU is concerned that this rule will lead to severe market disruption in the individual and small-group health insurance markets,” Trautwein says in a statement. “While NAHU agrees with the goal of providing consumers with greater value for health care dollars spent, medical loss ratio requirements significantly and negatively impact coverage choice and affordability.”

State insurance regulators and HHS all repeatedly acknowledged the harm the MLR calculation could do to agents and brokers, Trautwein says.

“We will continue to work with members of Congress to revise the MLR formula through the legislative process,” Trautwein says.