Posted December, 6 2011 by arianne
Just to keep folks in the loop, in a previous post we had talked about medical-loss ratios (MLR) and how many of those in the insurance agent and broker community had been pushing to shift broker and agent commissions from the “administrative” side of the MLR calculation to the “patient care” side.
The issue was with the National Association of Insurance Commissioners (NAIC) the last time we checked in, which was gearing up for a vote on the matter. The NAIC passed a resolution asking for the U.S. Department of Health and Human Services (HHS) to stop treating broker and agent commissions as administrative costs for the purposes of MLR calculations.
For the record, this resolution passed in the NAIC by a very narrow margin (26-20 with 5 abstaining). New York’s own insurance commissioner voted “no.”
From there, the resolution went to HHS for consideration. But, last week HHS announced that it would not make changes to how agent and broker commissions are classified for the purposes of MLR calculations related to the health reform law. Insurance broker and agent commissions will remain as “administrative” costs and will not cut into the portion of insurance expenses that are reserved for patient care.
So, there you have it.