NU Online News Service, Nov. 24, 11:57 a.m.EST

Insurance agents plan to take their battle to retain theircurrent health care insurance commissions to Congress.

In the latest move connected to how agent commissions will beaccounted for in the new medical loss ratio (MLR) guidelines, theNational Association of Health Underwriters said it will be seekinglegislation in the next Republican-controlled House that wouldexempt agent commissions from the MLR.

The MLR guidelines, proposed by the National Association ofInsurance Commissioners (NAIC) and adopted by the Department ofHealth and Human Services (HHS), deal with how the new health carelaw provision that individual health insurance policies must spend80 percent of premiums on medical care and quality improvementactivities, with administrative costs limited to a maximum of 20percent. The administrative cost cap for group health plans is 15percent.

Agent groups had argued to exclude agent commissions from the 20percent administrative cost restriction, but the NAIC and HHSdeclined to grant a formal pass-through for commissions becausethey were unsure of their legal authority to do so.

Now, NAHU has joined the Council of Insurance Agents andBrokers, the Independent Insurance Agents and Brokers of Americaand the National Association of Insurance and Financial Advisers insaying that they plan to seek a legislative solution if HHS doesnot grant a waiver for agent commissions.

"NAHU is concerned that this rule will lead to severe marketdisruption in the individual and small-group health insurancemarkets," NAHU CEO Janet Trautwein said in a statement.

"While NAHU agrees with the goal of providing consumers withgreater value for health care dollars spent, medical loss ratiorequirements significantly and negatively impact coverage choiceand affordability."

State insurance regulators and HHS all repeatedly acknowledgedthe harm the MLR calculation could do to agents and brokers,Trautwein said.

IIABA said it will also push for congressional intervention ifHHS does not act. "The IIABA is very concerned that the MLRprovision of the new health care reform law will have a devastatingeffect on the private marketplace and that consumers will benegatively impacted," said Charles Symington, IIABA senior vicepresident for government affairs.

"If, after hearing from various interested parties, HHS does notfix this language before the rule is final, we hope that Congresswill step in and revise the MLR formula through the legislativeprocess," he said.

Terry Headley, president of NAIFA, said the regulations treatagent commissions as non-claims expenses, and decline specialtreatment for such expenses. "NAIFA will provide comments on theregulations and also will seek a bipartisan legislative approach inthe 112th Congress to ensure professional, licensed and regulatedagents can be fairly compensated for assisting consumers," hesaid.

Officials at CIAB said the entire industry will work to get thenew Republican-led House to pass legislation containing a number offixes to the healthcare reform legislation.

The problem will be in the Senate, according to a CIAB official,where there is strong support for limiting commissions as a meansof helping control health care costs.

A CIAB official particularly mentioned Sen. John Rockefeller,D-W.Va., chairman of the Senate Commerce Committee, an advocate fora strong MLR, and said consumer groups support controls on agentcommissions as part of the effort to control health care costs.

"We can get anything we want through the House," said oneindustry lobbyist. "The problem will be the Senate."

The MLR provisions are set to take effect Jan. 1, 2011.