NU Online News Service, Nov. 23, 11:34 a.m.EST

The National Association of Insurance Commissioners late Tuesdayapproved a resolution asking both the Department of Health andHuman Services and Congress to act promptly to exempt insuranceagents from the medical loss ratio provision of the healthcarereform law.

The vote was 26-20.

The resolution says HHS “should take whatever immediate actionsare available to the Department to mitigate the adverse effects theMLR rule” is having on health insurance agents.

Previously, HHS regulations implementing the federalhealthcare-reform law classified producer compensation withinoverall administrative expenses that are limited to 15 percent or20 percent of premiums collected. Agents have sought to reversethat by excluding commissions from the MLR.

The NAIC resolution alters a course regulators took earlier thisyear. In July, the NAIC dropped support for a bill that would have excluded commissionsfrom the MLR

An NAIC taskforce headed by Florida Commissioner Kevin McCartypledged at the time to work with all interested parties and HHS to“evaluate the possibility of a compromise that would result in amore timely result than pursuing a change [via Congress] in theMLR.”

According to a healthcare industry analyst and the Californiainsurance commissioner, the Department of Health and Human Serviceshas no legal authority to exempt agent commissions from the MLR, asthe resolution suggests.

Ira Loss, a healthcare analyst at Washington Analysis, says thechange would need Congressional action because the statutorydefinition of MLR does not allow commissions to be exempt.

Industry officials say the key impact, if any, of the resolutionwould be on Congressional action.

Sen. Jay Rockefeller, D-W.Va., chairman of the Senate CommerceCommittee, says in reaction to the NAIC vote that he had sent aletter to McCarty, primary sponsor of the resolution, stating, “Iam disappointed that a small majority of insurance commissionershave lined up with special interests today rather thanconsumers.”

Rockefeller was a key driver behind including the MLR provisionin the Patient Protection and Affordable Care Act.

Rockefeller adds, “Millions of individuals and small businessowners are already paying too much for their health insurance;getting them some much needed relief should be our toppriority.”