Senator Lamar Alexander, a Republican from Tennessee and chairman of the Senate Health, Education, Labor and Pension Committee, speaks during a nomination hearing in Washington, D.C., U.S., on Wednesday, Nov. 15, 2017. The Trump administration's pick for solicitor of labor would be charged with overseeing one of the largest government legal shops and have independent authority to file lawsuits enforcing some 180 federal workplace statutes. Photographer: Zach Gibson/Bloomberg Sen. Lamar Alexander, R-Tenn. (Photo: Zach Gibson/Bloomberg)

Health Agents for America (HAFA) wants members to call senators on the Senate Health, Education, Labor and Pensions Committee, to ask the senators to kill a new health insurance producer compensation provision.

Sen. Lamar Alexander, R-Tenn., the chairman of the committee, and Sen. Patty Murray, D-Wash., put the provision in Section 308 of S. 1895, their Lower Health Care Costs Act bill.

Alexander and Murray have said they expect members of the committee to hold a meeting on S. 1895 Tuesday.

(Related: Senators Avoid Agent Comp Topic at Health Cost Bill Hearing)

The bill includes many provisions related to matters such as drug price transparency, health care provider price transparency, and “surprise medical bills,” along with the producer compensation disclosure provision.

“Take a few minutes out of your day this week and call each of the HELP Committee offices,” HAFA said in an email sent to members. “Identify yourself. You would like to leave a message for the senator requesting that they remove Section 308 from the Lower Health Care Costs Act markup. Respectfully, our compensation is not the reason health care premiums are high.”

HAFA is also asking members to fax personal letters about the issue to the individual senators on the Senate HELP Committee, when fax numbers are available.

HAFA has provided a copy of a letter that Quentin Ledford, a benefits consultant based in Crossville, Tennessee, has already sent.

“While I do not have any issues with transparency, I do take exception to any legislation which unnecessarily creates such unduly burdens and costs as the following Section 308 of your proposed bill reportedly will do,” Ledford writes in the letter, according to the copy provided by HAFA.

Health insurers have already responded to the Affordable Care Act by cutting health producer compensation in half, and health insurers already include producer compensation spending in the rates they file with state insurance regulators, Ledford writes.

“Are you aware that many insurers no longer pay compensation to agents and brokers for any individual health plans they offer?” Ledford asks. “How much more of a burden do you want to plans on the many thousands of agents and brokers who provide services to their communities?”

Ledford adds that firms like his that serve small businesses are working harder than ever, because compliance requirements have made adding an employee to plan or terminating a departing employee’s coverage so time-consuming.

“Yet, most of us continue to provide services to our clients even though our compensation has been reduced by 50% or more since the passage of the ACA,” Ledford writes. “I have no problem with the carriers reporting my compensation to my clients each year with their plan renewals. After all, a lot of insurers do this anyway.”

But Section 308 would require brokers and benefits advisors to spend scarce time to generate still more reports, Ledford writes.

Ledford says the real health care system cost problems come from big health care organizations squeezing out competition from small hospitals and independent physicians, and from the lack of transparency or flexibility for physicians in the world of health care provider network contracting, not from brokers’ compensation.

The S. 1895 Comp Disclosure Provision

Section 308 of S. 1895 would require agents, brokers and benefits consultants to provide health insurance clients with regular reports on their direct and indirect compensation.

Intermediaries in the group market would send the reports to the plan sponsor.

Health insurers would be responsible for sending agent compensation disclosures to consumers in the individual market.

Resources

A copy of S. 1895 is available here.

Links to hearing resources, including a video recording of the hearing, are available here.

— Read Key Health Bill Draft Includes Agent Comp Disclosure Sectionon ThinkAdvisor.

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