State insurance regulators decided early on during a National Association of Insurance Commissioners (NAIC) meeting to try to protect producers from being hurt by the new medical loss ratio (MLR) rules.
The plenary, the group that includes all voting members of the NAIC, Kansas City, Mo., approved a charge stating that the NAIC’s Executive Committee Task Force on Professional Health Insurance Advisors should work quickly to give the NAIC’s executive committee ideas about ways to keep the MLR rules from hurting consumers, health insurance markets, and health insurance agents and brokers.
The federal MLR rules implement provisions in the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA).
The MLR rules 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.
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 in understanding the health insurance market, 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.
NAIC members also: