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 On March 27th, the Professional Health Insurance Advisors Task force, part of the Executive Committee at the National Association of Insurance Commissioners (NAIC), is planning to hold a hearing on producer compensation in Austin, Texas. During the hearing the task force is requesting comments from all interested people on the following questions:
- What is or is likely to be the impact of removing commissions from what is defined as premium under the MLR requirements?
- Have commissions been reduced since the passage of the federal law? If so, what is the impact of present and potential future commission reductions? Will this cause access issues? Is it likely agents/brokers will abandon health insurance markets?
- What will be the impact of a legislative change that treats producer commissions in the same manner as federal and state taxes for purposes of calculating the MLR?
- What is your opinion on the optimal solution to balance health plan/insurer concerns, consumer interests and the interests of agents/brokers?
Anyone interested can submit comments to tmullen@naic.org by March 21st to be considered.
Under the new MLR provision, health insurers are now required to spend at least 85% of large group and 80% of individual and small group revenue on quality improvement in health care with the other going toward administrative costs. This will affect nearly 470,000 health insurance agents and cut nearly 50% of broker’s pay. The task force is focused on making sure that the MLR is not going to cause problems that critics have warned about, including smaller companies going out of business, extreme cuts in agent commissions, and reduced service and support to consumers.
Please give us your feedback!
Do you currently write underage health insurance? If passed, how will the new MLR requirements impact your business model?
Sources: National Underwriter, Employee Benefit Adviser, National Association of Health Underwriting, National Association of Insurance Commissioners
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