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PIA National Files Comments in Advance of NAIC Hearing on Agent Compensation in Healthcare

WASHINGTON, March 23, 2011 - The National Association of Professional Insurance Agents (PIA) has filed comments with the National Association of Insurance Commissioners...
March 22, 2011

WASHINGTON, March 23, 2011  - The National Association of Professional Insurance Agents (PIA) has filed comments with the National Association of Insurance Commissioners (NAIC) Professional Health Insurance Advisors Task Force in advance of a March 27 public hearing. The hearing has been called to examine producer compensation concerns as they relate to the Patient Protection and Affordable Care Act (PPACA).

In its comments, PIA recommends that action be taken to remove producer compensation from the calculation of medical loss ratios (MLR) under PPACA, noting that Congress specifically included participation by agents in the newly designed healthcare system.

"Agents were included because the legislators recognize the value agents provide to consumers in helping make important decisions regarding their health risk management," the PIA letter states. "We don't believe HHS (the federal Department of Health and Human Services) should be allowed to exclude agents from the marketplace through regulation, especially when the underlying legislation specifically included agents. The role of the health agent is indispensable for many, especially as a myriad of new options becomes available to consumers."

"We fully support the proposed legislation advanced by the NAIC that would essentially treat producer commissions in the same manner as federal and state taxes for purposes of calculating the MLR. This solution would allow carriers to continue to pay their agents for selling and servicing health policies. The optimal solution to balance health plan/insurer concerns, consumer interests and the interests of agents and brokers would be for HHS to calculate agent commissions outside the MLR. This action would immediately resolve the issue and provide clarity and certainty to agents, carriers
and consumers."

PIA emphasized that consumers need to be able to utilize the services of professional, licensed independent insurance agents as they navigate the complexities of a health insurance system that is undergoing significant change as the result of PPACA.

"Purchasing health insurance is not like purchasing other products and services," the PIA letter states. "If you make a poor choice, you may not be aware of the consequences of your decision until it's too late. Many consumers who will be most negatively affected by the loss of licensed, trained health insurance agents are the elderly and small business owners who don't fully understand all the options available to them."

PIA expressed appreciation to the NAIC and the National Conference of Insurance Legislators (NCOIL), both of which have passed resolutions affirming that licensed professional agents are an indispensible part the healthcare system, delivering valuable services to consumers. As an advocate for their customers, independent insurance agents have a particular interest in ensuring that affordable coverage options exist in the marketplace.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America SM. PIA's web address is www.pianet.com.

Read PIA's Comment Letter