Brokers Back MLR Bill

IIABA backs legislation that would exclude agent compensation from medical loss ratio determination.

Insurance Networking News, February 3, 2012

Bill Kenealy

Sens. Mary Landrieu (D-La.) and Johnny Isakson (R-Ga.) have introduced the Access to Independent Health Insurance Advisors Act of 2012.

The bill seeks to exempt agent compensation from the Medical Loss Ratio (MLR) formula by the Patient Protection and Affordable Care Act (PPACA). The Department of Health and Human Services (HHS) has ruled that agent compensation is a “non-claims” cost and subject to the MLR formula which mandates that at least 80 percent (individual and small group) or 85 percent (large group) of premiums collected by the carrier must be spent on “health care quality improvement.”

The Independent Insurance Agents & Brokers of America said including agent compensation as a “non-claims” cost would squeeze out agents and ultimately harm consumers.

“If the MLR calculation is not quickly corrected to exclude agent compensation, consumers will suffer the prospect of losing the professional, licensed guidance of insurance agents during this time of great change in the health insurance market,” Charles Symington, IIABA SVP for government affairs, said in a statement. “This legislation is critical to agents and consumers alike, and we thank Senators Landrieu and Isakson for their bipartisan efforts and leadership.”

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