NU Online News Service, Sept. 3, 10:31 a.m.EDT

WASHINGTON–Health regulators will deal this month witha request by agents that their commissions not be treated as partof a company's premium revenue for purposes of establishing medicalloss ratios.

The National Association of Insurance Commissioners (NAIC) andthe Department of Health and Human Services (HHS) are targetingSept. 23 as the deadline for finalizing a provision of the healthcare reform law that limits administrative costs to a maximum of 20percent, and in some cases, 15 percent of premiums.

According to officials of the National Association of Insuranceand Financial Advisors (NAIFA), the National Association of HealthUnderwriters (NAHU) and the Independent Insurance Agents andBrokers of America (IIABA), the industry is lobbying the NAIC toestablish agent commissions as a pass-through expense excluded fromthe MLR calculation.

According to a NAIFA official, agent groups are also working tohave a rebate transition adopted to allow companies the timenecessary to modify their operations in a staged process in orderto avoid significant consumer harm. "There are several states wherethere could be particular concern given current statutory MLRlevels and the number of people with individual coverage," a NAIFAofficial explained.

The NAIC passed a resolution at its summer meeting supporting acarve-out for agents on the commission issue. The resolution wassponsored by Florida Insurance Commissioner Kevin McCarty,co-sponsored by 24 other commissioners and passed unanimously bythe NAIC at a plenary session.

In seeking approval, Commissioner McCarty expressed "seriousconcerns" that an immediate adoption of the MLR ratios withoutaccommodating the needs of health insurance agents "will negativelyimpact the selection process for health insurance in the smallgroup and individual market."