A Senate bill introduced Friday as a companion to legislation in the House that would exclude agent compensation from the Medical Loss Ratio formula has industry organizations optimistic about a permanent fix.

The National Association of Health Underwriters, Independent Insurance Agents & Brokers of America, National Association of Insurance Agents and Financial Advisors and other industry organizations applaud Sens. Mary Landrieu (D-LA), Johnny Isakson (R-GA), Ben Nelson (D-NE) and Lisa Murkowski (R-AK) for introducing the bipartisan proposal, S. 2068.

The House bill, H.R. 1206, at press time had 170 bipartisan co-sponsors. The bill was introduced in the House by Representatives Mike Rogers (R-MI) and John Barrow (D-GA) in March 2011.

S. 2068 makes some slight modifications to H.R. 1206, based on the MLR experience over the past year. Reps. Rogers and Barrow support these changes, which NAHU highlights:

  • Limiting the MLR exclusion to the individual and small-group health insurance markets, where the problem is most severe.
  • Clarifying that any bonuses agents may receive remain a carrier administrative expense. Unlike commissions, bonuses are paid by the carrier and can be reasonably deemed administrative expenses.
  • Striking language expanding the state MLR adjustments, as the majority of states that applied have already received their determination from the Department of Health and Human Services. Under S. 2068, the waiver process will remain as is.

“We were excited about the introduction,” says Diane Boyle, VP of federal government relations for NAIFA, in an EBA podcast. “Having something introduced on the Senate side not only is good for Senate support but it also is a demonstration to the House how important the issue is to the agents and our community.” Click here to listen to the entire podcast with Boyle.

"Millions of individuals and small businesses depend on licensed agents and brokers to help them navigate the health care marketplace and find health plans that suit their needs and budgets," says Janet Trautwein, NAHU CEO. “Without agents' expert advice, many individuals and businesses will end up spending more for health insurance and receive less care.”

President and CEO of the Big “I”, Robert Rusbuldt, agrees and urges both Senate and House leadership to quickly act on the Landrieu-Isakson legislation as well as Rogers-Barrow legislation:

“We are extremely grateful to [Sens.] Landrieu and Isakson for filing this bill as it would provide agents relief from the MLR regulation which has resulted in devastating consequences for our small business members.”

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