Previously, HHS regulations implementing the federal healthcare-reform law classified producer compensation within overall administrative expenses that are limited to 15 percent or 20 percent of premiums collected. Agents have sought to reverse that by excluding commissions from the MLR.

The NAIC resolution alters a course regulators took earlier this year. In July, the NAIC dropped support for a bill that would have excluded commissions from the MLR

An NAIC taskforce headed by Florida Commissioner Kevin McCarty pledged at the time 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.”

According to a healthcare industry analyst and the California insurance commissioner, the Department of Health and Human Services has no legal authority to exempt agent commissions from the MLR, as the resolution suggests.

Ira Loss, a healthcare analyst at Washington Analysis, says the change would need Congressional action because the statutory definition of MLR does not allow commissions to be exempt.

Industry officials say the key impact, if any, of the resolution would be on Congressional action.

Sen. Jay Rockefeller, D-W.Va., chairman of the Senate Commerce Committee, says in reaction to the NAIC vote that he had sent a letter to McCarty, primary sponsor of the resolution, stating, “I am disappointed that a small majority of insurance commissioners have lined up with special interests today rather than consumers.”

Rockefeller was a key driver behind including the MLR provision in the Patient Protection and Affordable Care Act.

Rockefeller adds, “Millions of individuals and small business owners are already paying too much for their health insurance; getting them some much needed relief should be our top priority.”