NCOIL to Vote on MLR Bill at Summer Meeting

The National Conference of Insurance Legislators will consider a resolution backing federal legislation to benefit agent and broker compensation under the Affordable Care Act at its summer meeting in Newport, R.I. A National Association of Insurance Commissioners task force recently recommended a similar measure.

NCOIL's Health, Long-Term Care & Retirement Issues Committee will consider the measure supporting H.R. 1206, which would remove producer compensation from medical loss ratio calculations, on July 16. Because NCOIL President George Keiser proposed the recommendation within 30 days of the meeting, separate two-thirds majority votes are required to place it on the voting agenda and for adoption.

Under regulations adopted under the federal health reform law, agent and broker pay is considered a nonmedical expense for health plans. Carriers in the individual and small group market are required to devote 80% of their premiums to covering medical costs. In the large group market, the requirement is 85%. The law will also require insurance carriers to provide rebates to policyholders starting in 2012, for premiums paid in the previous year, if these standards are not met. The bill from Rep. Mike Rogers, R-Mich., currently has 100 co-sponsors. It is before the House Energy and Commerce Subcommittee on Health.

Keiser said he hopes to give the bill a nudge in order to protect producers who have reported losses of income as a result of the current regulation. "I, personally, strongly support the elimination of factoring in commissions for the MLR," the North Dakota state representative said.

The NAIC's Professional Health Insurance Advisors Task Force recommended association support for the bill June 30. The NAIC Executive Committee briefly discussed the recommendation in a July 12 conference call meeting, but took no action (BestWire, July 12, 2011). No NAIC action is currently scheduled.

Amid speculation that the NAIC was backing away from the bill -- as the task force position is not the formal NAIC stance -- Florida Insurance Commissioner Kevin McCarty, the task force chairman, reaffirmed his support. "Commissioner McCarty has not changed his position, and continues to support the bill sponsored by Mike Rogers," the Florida Office of Insurance Regulation said in a statement.

During the executive meeting, McCarty urged commissioners to continue to seek a regulatory solution as well. "The commissioner ... reported that the task force is continuing to work with all interested parties and [the U.S. Department of Health and Human Services] to evaluate the possibility of a compromise that would result in a more timely result than pursuing a change in the MLR," according to the statement.

"What happened yesterday at the NAIC wasn't a surprise, nor was it an unwelcome development. The insurance commissioners continue to work towards a resolution of this critical issue, as does NAHU, our fellow agent organizations and other coalition partners," National Association of Health Underwriters Chief Executive Officer Janet Trautwein said in a statement.