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November 29, 2010 at 07:00 PM
WASHINGTON BUREAU — Insurance producer groups are rounding up congressional support for a bill that would exempt health insurance commissions from minimum medical loss ratio (MLR) calculations.
The U.S. Department of Health and Human Services (HHS) released the minimum MLR interim final regulations Nov. 22.
The regulations implement provisions in the Affordable Care Act, the legislative package 
that includes the Patient Protection and Affordable Care Act (PPACA), that will require that 85% of large group premium revenue and 80% of individual and small group premium revenue go to medical care and quality improvement efforts. Starting in 2012, plans that miss the mark are supposed to send customers rebates.
The HHS minimum MLR calculation rules will let insurers keep federal, state and local taxes out of the calculations.
Under the terms of the producer group bill draft, agent commissions would receive the same exempt status as taxes.
The draft also would exclude any payments made to health insurance agents from the 2012 rebate calculations.
Producers have argued that tight MLR limits could put pressure on insurers to reduce agent and broker commissions, even though producers provide consumers and employers with much-needed help with understanding the health insurance market, and they also have argued that the true payers of commissions are the customers.
Insurers collect commissions and pass them on to producers as a courtesy to customers, and the minimum MLR rules should therefore exclude producer commissions from the ratio calculations, producers have argued.
The producer group proposal was drafted by officials at the National Association of Health Underwriters (NAHU), Arlington, Va., industry sources say. Other groups said to be supporting the proposal include the National Association of Insurance and Financial Advisors (NAIFA), Falls Church, Va.; the Council of Insurance Agents and Brokers (CIAB), Washington; and the Independent Insurance Agents and Brokers of America (IIABA), Alexandria, Va.
The new Republican majority in the House likely will support the bill, and passing the bill could be possible even in the Senate, where Democrats still have a majority, because 7 Democrats on the Senate Finance Committee are facing reelection in 2012, sources say.
