The National Association of Insurance Commissioners on March 3 released for comment draft legislation (see below) that would remove broker compensation from the medical loss ratio calculation. Reportedly “nearly identical” to upcoming legislation from Michigan Rep. Mike Rogers (R), the National Association of Health Underwriters’ Jessica Waltman calls the bill a significant step.
The NAIC’s Professional Health Insurance Advisors Task Force, established last November, is behind the proposal. According to Waltman, Florida Insurance Commissioner Kevin McCarty, who chairs the task force, announced that the NAIC will hold a public hearing on the legislation during their spring meeting at the end of March. He’s requested comments on the legislation be sent to his office by March 14.
According to Waltman, the NAIC is also pursuing a resolution asking the Department of Health and Human Services to look at granting waivers beyond the individual market for exemptions to the Patient Protection and Affordable Care Act’s mandate that only 15%-20% of insurance company costs be spent on administrative services —the category that broker compensation currently falls into.
“We’re thrilled that they’re going forward with supporting a legislative fix to this problem as well as looking at working with [HHS Secretary Kathleen Sibelius] on a regulatory solution,” says Waltman. “Because we think that we need to work on both avenues. There needs to be a long-term statutory fix, but obviously that can take time. The secretary’s action could be more immediate. So we’re pursing it from both ends and we are glad that they are as well.”
Not everyone is thrilled. In comments posted on Politico’s website, Consumer Watchdog’s Carmen Balber believes “brokers tried and failed to get lifetime protection for their commissions in the federal reform law, then tried and failed to get protection written into the regulations adopted by the Department of Health and Human Services,” she says. “[In] Congress, they see a chance to guarantee their own paydays at the expense of ever-rising health insurance premiums.”
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