WASHINGTON BUREAU — The Professional Health Insurance Advisors Task Force at the National Association of Insurance Commissioners (NAIC) has endorsed H.R. 1206, a U.S. House bill that calls for removing agent commissions from medical loss ratio (MLR) calculations.
Task force members decided to support the bill Thursday during a conference call.
The NAIC formed the task force in November 2010. The head of the task force, Kevin McCarty, the Florida insurance commissioner, declined to comment on the task force recommendation.
Jane Cline, the West Virginia commissioner, voted against supporting the bill, and Wayne Goodwin, the North Carolina commissioner, abstained.
The NAIC executive committee must consider the issue before the NAIC as a whole can give H.R. 1206 official support.
The Patient Protection and Affordable Care Act of 2010 (2010) requires health insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts.
The U.S. Department of Health and Human Services (HHS) has issued interim regulations that would classify producer compensation as an administrative expense.
Producers have argued that their compensation should be excluded from the calculations because customers are the ones who pay the commissions. Insurers collect the commissions as a courtesy to the customers, producers say.
Producer groups have reported this year that insurers are cutting individual and small group commissions
50% this year and attributing the changes to the new MLR rules.
Rep. Mike Rogers, R-Mich., the primary sponsor of H.R. 1206, said recently at a House hearing that health insurance agents and brokers will continue to be in a desperate situation unless Congress acts to change the MLR provision in the HHS regulation.
Consumer groups have sent the NAIC task force a letter asking the task force and the NAIC as a whole to support the current HHS regulation.
“Data about the extent of commission changes and their causes are inconclusive, suggesting that amending federal law is unwarranted,” the coalition says in the letter.
“No evidence has been presented to indicate that consumers have lost access to brokers” as a result of the new MLR policy, the coalition says.
Figures presented by National Association of Health Underwriters (NAHU), Arlington, Va., to the NAIC’s Health Insurance and Managed Care Committee regarding producer compensation “illustrate that many carriers have not altered commission levels between 2010 and 2011, and some have actually increased commissions,” the coalition says.