House Panel Could Move Soon on MLR Issue

NU Online News Service, April 10, 3:18 p.m. EST

A House panel plans to act soon on legislation that would exempt agent commissions from the Medical Loss Ratio provision of the healthcare reform law.

Reliable sources say the House Energy and Commerce Committee will take up the bill shortly after it returns from its Easter/Passover recess on April 16.

The action is likely timed to coincide with theWashingtonmeeting of the Independent Insurance Agents and Brokers, which starts April 24.

A spokesman for the E&C panel says, “We don’t have a timeline for mark-up yet.”

The bill is H.R. 1206, the “Access to Professional Health Insurance Advisors Act of 2011.”

It is sponsored by Rep. Mike Rogers, R-Mich., and Rep. John Barrow, D-Ga. It was introduced last March.

Similar legislation, S. 2068, the Access to Independent Health Insurance Advisors Act, was introduced in the Senate in February by Sen. Mary L. Landrieu, D-La., chair of the Senate Committee on Small Business and Entrepreneurship, and Sen. Johnny Isakson, R-Ga. Sens. Lisa Murkowski, R-Alaska, and Ben Nelson, D-Neb., are also cosponsors of that legislation.

The bills are somewhat different, but in general seek to "clarify" that producer compensation would not be considered part of MLR ratio. This provision limits administrative costs in health-insurance premiums to 15 percent of premiums for large insurance groups and 20 percent for small groups. Agents have argued that their commissions should not count toward these administrative costs, and doing so could reduce their commissions by up to half on health-insurance products.

Agency trade groups declined to confirm or deny that House action was pending.

“We will be watching this summer for what the Supreme Court decides relative to the constitutionality of the healthcare law as it may determine the pathway forward in terms of timing and issues the House will move. We are working closely with the Energy and Commerce Committee staff to be ready,” says John Greene, NAHU’s vice president of congressional affairs.

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