The National Association of Insurance Commissioners today dropped its support for exempting insurance agents’ commissions from the medical loss ratio provision of the healthcare reform law, according to the Daily Insurance Reporter.
According to the article, the NAIC acted during a plenary conference call after several commissioners, led by California insurance commissioner Dave Jones, voiced opposition.
The decision not to pursue a vote was made by Florida insurance commissioner Kevin McCarty, head of a task force that, on June 30, approved a resolution voicing support for House legislation that would have exempted agents’ commissions from the MLR (H.R. 1206).
Interim regulations issued by the Department of Health and Human Services to implement the federal healthcare reform law classified producer compensation within overall administrative expenses that are limited to 15 percent or 20 percent of premiums collected. Under H.R. 1206, producer compensation would be calculated outside of that MLR.
Producer groups have testified that agent commissions have dropped 50 percent this year because of the HHS action implementing the MLR.
Rep. Mike Rogers, R-Mich., primary sponsor of the legislation, 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.
After Jones asked McCarty pointblank whether the task force vote represented NAIC policy, McCarty, the incoming NAIC president said, “No.” McCarty then dropped his effort to pursue a vote by the full plenary.