NCOIL to Agents: WE Love Ya, Baby

WASHINGTON BUREAU — The National Conference of Insurance Legislators (NCOIL) is backing an effort by health insurance agents to get Congress to exempt producer compensation from health insurance medical loss ratio (MLR) calculations.

The executive committee of NCOLI, Troy, N.Y., voted unanimously this weekend during the group's summer meeting in Newport, R.I., to support H.R. 1206, the Access to Professional PPACA toolkit Health Insurance Advisors Act bill.

The bill is sponsored by Rep. Mike Rogers, R-Mich.

Members of the NCOIL Health, Long-Term Care & Health Retirement Issues Committee endorsed the Rogers bill Saturday.

NCOIL also expressed support for health insurance producers' position on the MLR issue in December 2010, when it sent a letter to the U.S. Department of Health and Human Services (HHS) asking HHS to keep producer compensation out of MLR calculations.

NCOIL President George Keiser, a Republican state representative from North Dakota, says health insurance agents and brokers help consumers navigate through the complex process of benefit shopping and also help consumers deal with claims and other reimbursement issues that arise when coverage is in place.

Agents' services are "especially needed now, as we all work to understand the complexities of federal

reform," Keiser says.

The MLR provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) require insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts. HHS is classifying producer compensation as an administrative expense; producers argue that the commissions should be left out of the MLR formula, because consumers are the ones who really pay the commissions.

Health insurers collect the commissions as courtesy to consumers, producers argue.

Producers have reported that insurers are using the PPACA MLR provision to justify cutting individual and small group producer commission rates as much as 50%.

A task force at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., also expressed support for H.R. 1206, but the support measure ran into turbulence July 13 during an NAIC conference call.

The NAIC plenary – the body that including all voting NAIC members – held back from voting on the measure.

Measure supporters have decided instead to engage in further talks with HHS officials.