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NAIC Executive Committee Approves Charge for Health Agent Task Force

The National Association of Insurance Commissioners (NAIC) Executive/Plenary Committee has approved a charge for a task force formed to ensure that licensed agents and brokers...
December 21, 2010

The National Association of Insurance Commissioners (NAIC) Executive/Plenary Committee has approved a charge for a task force formed to ensure that licensed agents and brokers are fairly compensated for the services they provide in the wake of healthcare reform. The NAIC has said the new task force is designed to protect insurance agents and brokers from the healthcare reform law's side effects.

The task force was created after the NAIC in August refused to put to a vote a proposal to exclude producer compensation from Medical Loss Ratio (MLR) calculations. The argument made by the NAIC that it lacked the authority to make such a recommendation rings hollow. A similar rationale was then cited by the Department of Health and Human Services (HHS) when it accepted the NAIC's recommendation, closing the circle that now threatens to shut agents and brokers out. Along with creating this task force, the NAIC also adopted a resolution in August that recognized the "indispensable" role of agents and brokers in the evolving health insurance market.

The Task Force charge, adopted last week, states:

The Executive Committee Task Force on Professional Health Insurance Advisors shall work in a expedient manner to identify, analyze and recommend options to the Executive Committee for addressing the negative impacts on health insurance brokers/agents, insurance consumers and insurance markets as a result of the Medical Loss Ratio (MLR) requirements of the Patient Protection and Affordable Care Act (PPACA) and the regulation as issued by the U.S. Department of Health and Human Services (HHS).

What It Means to Agents: This Task Force would not have been necessary had the NAIC not failed to support the role of agents and brokers when making its MLR recommendations to HHS. The NAIC missed an opportunity to protect agents' interests when it submitted its recommendations without an amendment that would have excluded agent compensation from MLR calculations.

The promise of this task force must be matched by action. It is now up to this task force to demonstrate that it wants agents to be fairly compensated and that this Task Force effort is real - not just a sop to agents and brokers.

Monday's Florida Times-Union newspaper has a compelling story on the value of health insurance agents. Here's how it begins:


One of Kim Stanley's clients needed a heart transplant earlier this year, but the hospital didn't accept the man's insurance.

The veteran Jacksonville Beach health insurance agent made a deal with the hospital to take his plan and cleared up a paperwork problem that threatened to derail his life-saving surgery. For her 20 hours of effort, Stanley drew her $6 commission that month from the man's group insurance plan.
You can read the rest of this article here.

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