Health insurance agents and brokers are mobilizing to persuadeCongress to get producer commissions out of health insuranceminimum medical loss ratio (MLR) calculations.

The groups girding for battle over the new MLR rule include theNational Association of Health Underwriters (NAHU), Arlington, Va.;the National Association of Insurance and Financial Advisors(NAIFA), Falls Church, Va.; the Council of Insurance Agents andBrokers (CIAB), Washington; and the IndependentInsurance Agents andBrokers of America (IIABA), Alexandria, Va.

"NAHU is concerned that this rule will lead to severe marketdisruption in the individual and small-group health insurancemarkets," NAHU Chief Executive Janet Trautwein says in astatement.

State insurance regulators and HHS repeatedly acknowledged thatthe new MLR rules could hurt agents and brokers, Trautweinsays.

The U.S. Department of Health and Human Services (HHS) releasedthe minimum MLR regulations Monday. The regulations are based on adraft developed by the National Association of InsuranceCommissioners (NAIC), Kansas City, Mo., and they will guideimplementation of provisions in the Affordable Care Act, thelegislative package that includes the Patient Protection andAffordable Care Act (PPACA).

The provisions, set to take effect Jan. 1, 2011, will require85% of large group revenue and 80% of individual and small grouprevenue to be spent on patient care and quality improvementefforts.

The regulations are supposed to appear in the Federal RegisterDec. 1.

Producer groups fear the new rules could put pressure oninsurers to cut commissions. They have been arguing that the MLRformula should exclude commissions altogether, because insurerssimply collect commissions from the true payers of commissions –the customers – and pass the money on to producers.

HHS says in the preamble to the regulations that it willparticipate in an agent-broker issues working group with the NAICand may grant waivers to states in which the new minimum MLR rulesappear to be destabilizing the individual health insurancemarket.

Producers say they will seek a legislative solution if HHS doesnot quickly create an MLR rule "pass through" provision forproducer commissions.

Charles Symington, a senior vice president at IIABA,

notes that HHS released the MLR regulations in the form ofinterim final regulations, and rather than as finalregulations.

"If, after hearing from various interested parties, if HHS doesnot fix this language before the rule is final, we hope thatCongress will step in and revise the MLR formula through thelegislative process," Symington says.

Republicans now control the House, but Democrats still have anarrow majority in the Senate.

CIAB officials say the insurance industry will work to get theHouse to pass legislation containing a number of health care lawchanges, including an MLR commission change, but they add thatthere is strong support in the Senate for trying to control healthcosts by limiting commissions.

NAIFA President Terry Headley says NAIFA will seek a bipartisanlegislative approach.

NAIFA also will be working with its state associations to see ifpursuing destabilization waivers would make sense in any of theassociation's states.

Georgia, Iowa, Maine and South Carolina already have told HHSthat they will be seeking waivers, and Florida and West Virginiaare also expected to apply for waivers, Headley says.

Arthur Postal is National Underwriter's Washington Bureauchief. National Underwriter is part of Summit Business Media, whichincludes Florida Underwriter.