House committee wants broker fees out of MLR

Legislation making its way through the House of Representatives would exempt insurance agents' commissions from the reform law's medical loss ratio.

The Health Subcommittee of the House Energy & Commerce Committee passed the bill, HR 1206, which would prevent insurers from counting agent fees as administrative costs under the MLR requirement, reported The Hill's Healthwatch.

"The health insurance industry and the broker community have long sought to re-jigger the MLR formula to allow broker fees to count and thus make it easier for health insurers to reach the federal thresholds," Beth Mantz-Steindecker of Washington Analysis wrote in an investor's note, according to LifeHealthPro.

The bill is strongly supported by insurance agents and brokers who have seen a drop in commissions, some as high as 50 percent, since the MLR requirement went into effect. The National Association of Insurance Commissioners also backs the agent exemption. However, the U.S. Department of Health & Human Services said it doesn't support the legislation, Insurance & Financial Advisor reported.

To learn more:
- read the bill, HR 1206
- see the LifeHealthPro article
- check out The Hill's Healthwatch article
- here's the Insurance & Financial Advisor article