The National Association of Insurance Commissioners (NAIC) has decided an indirect, behind-the-scenes approach to reducing the strain on health-insurance agents through the medical-loss ratio (MLR) provision will be most effective.
In a surprise announcement, the NAIC decided against supporting House legislation that would exempt agents' commissions from the MLR.
Interim regulations issued by the Department of Health and Human Services (HHS) 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.
Kevin McCarty, Florida insurance commissioner and incoming NAIC president, says he is not dropping his support for an exemption but changing his approach.
“Commissioner McCarty has not changed his position and continues to support the bill sponsored by Mike Rogers, R-Mich., which would remove sales-agents' fees from the administrative costs of insurers for calculation of the medical-loss ratio,” a statement from his office says.
The NAIC task force McCarty heads continues to work with all interested parties and HHS to “evaluate the possibility of a compromise that would result in a more timely result than pursuing a change [via Congress] in the MLR,” the statement says.
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