Legislation that would exempt agent commissions from the medicalloss ratio (MLR) calculation mandated under thehealthcare-reform law passed a House committee today.

The bill is H.R. 1206. It is sponsored by Rep. Mike Rogers,R-Mich., and Rep. John Barrow, D-Ga. It was introduced lastMarch.

The bill was passed by voice vote by the House Energy andCommerce Committee (E&C). According to officials of thecommittee, the bill now goes directly to the House floor.

However, given that both the House and Senate will recess Fridayuntil after the November election, final action is unlikely beforelate fall. And, while the legislation could pass the House,its future in the more evenly-divided Senate is problematic,according to analysts at Washington Analysis.

The bill has strong support within the agent community, with theIndependent Insurance Agents and Brokers of America (IIABA), theNational Association of Insurance and Financial Advisors (NAIFA)and the National Association of Health Underwriters (NAHU) allvoicing strong support.

However, Charles E. Symington, senior vice president forgovernment affairs for the IIABA, acknowledged in a statement thatthe “the window of opportunity for the bill to become law this yearis quickly narrowing.”

He said the IIABA commends the bill's sponsors, Rogers andBarrow, for their diligent work on this issue and asks Congress tobuild on “recent momentum to pass this crucial fix.”

Democrats on the E&C committee challenge supporters'assertions that the MLR impact on insurance agents is“devastating,” and is impacting jobs.

The MLR provision in the Patient Protection and AffordableCare Act (PPACA) limits administrative costs on health carepremiums to 15 percent for large groups and 20 percent for smallgroup and individual market premiums.

The legislation only impacts agents serving the small group andindividual markets.

The bill also requires Health and Human Services (HHS) to deferto state insurance commissioners regarding requests for MLRwaivers.

In asking the committee to report out the legislation today,Rep. Fred Upton, R-Mich., chairman of the committee, saidPPACA's MLR requirement gives the HHSsweeping power over the design of health insurance at the expenseof consumer choice.

He adds, “The MLR rule also punishes agents and brokers who helpfamilies and employers find an affordable health plan that bestfits their needs.”

However, E&C panel Democrats said in a background brief thatwhile the MLR has been in effect, the number of jobs in the agentand broker field has increased, not decreased.

“Since May 2012, 7,000 jobs were added, according to thenon-partisan Insurance Information Institute,” the Democraticstatement said.

The Democratic statement also said, “In making MLR adjustmentrequests to the HHS, no state could prove – and many neverseriously contended – that the 80/20 rule was having a negativeimpact on consumers' ability to obtain broker services.”

Another hurdle for the legislation is an HHS study released lastweek that said consumers have saved $2.1 billion over the last yearbecause of the MLR.

Healthcare for America Now, which lobbied for the healthcarebill, also sent a statement to the committee noting that in 2012,nearly 13 million consumers received rebates of $1.1 billion frominsurers with excessive administrative expenditures in the previousyear.

Still, Ryan Young, IIABA senior director of federal governmentaffairs, contends, “If the MLR calculation is not quickly correctedto exclude agent compensation, consumers are at risk of losing theprofessional, licensed guidance of insurance agents during thistime of great change in the health insurance market.”