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PIA Expresses Disappointment at HHS Rejection of NAIC Request to Support Consumer Access to Licensed Agents

WASHINGTON, December 5, 2011 — The National Association of Professional Insurance Agents (PIA) has expressed disappointment that the Obama administration has rejected a request by the National Association of Insurance Commissioners (NAIC) that it take prompt action in support of consumer access to licensed health insurance agents and brokers under the healthcare law
December 5, 2011

WASHINGTON, December 5, 2011 — The National Association of Professional Insurance Agents (PIA) has expressed disappointment that the Obama administration has rejected a request by the National Association of Insurance Commissioners (NAIC) that it take prompt action in support of consumer access to licensed health insurance agents and brokers under the healthcare law.

The Department of Health and Human Services (HHS) rejected the NAIC request by adopting a final rule on December 2 implementing the medical loss ratio (MLR) provision of the Patient Protection and Affordable Care Act (PPACA). HHS acted despite an NAIC resolution adopted Nov. 22 asking HHS to take “whatever immediate actions are available to mitigate the adverse effects the MLR rule” is having on health insurance agents.

“PIA is disappointed that HHS failed to take action to ensure that consumers will have access to licensed health insurance agents and brokers,” said PIA National Executive Vice President & CEO Leonard C. Brevik. “Our members who sell health insurance want to continue doing so, but the Department of Health and Human Services (HHS) doesn’t seem to value the participation of producers. As a result, Congress must act.”

At issue are regulations by HHS which lumped agent and broker compensation into medical loss ratios (MLR) set at 80 percent to 85 percent under the Affordable Care Act. As a result, many agents report that their compensation was cut by as much as 50 percent.

“Congress mandated in the healthcare law that agents and brokers be full participants under the new healthcare law, but HHS is trying to undo that provision through the regulatory process,” Brevik said. “That’s why PIA supports the Professional Health Insurance Advisors Act of 2011 (H.R. 1206), a bill that would clarify that producer compensation will not be considered as part of the MLR and would take that decision completely out of the hands of HHS. Congress needs to fix what HHS has just broken.”

The MLR rules took effect on an interim basis January 1, 2011. HHS said the final rules, announced December 2, provide certainty as to how the MLR is calculated.

PIA believes that many consumers who would be most negatively affected by not being able to readily access licensed, trained health insurance professionals are the poor, the elderly and small business owners who may not fully understand all the complex coverage options available to them. “Making it more difficult to utilize licensed insurance professionals with a restrictive MLR rule and then sending consumers to a government website is like telling them to fend for themselves. It is anti-consumer,” Brevik said.

“Congress and HHS have consistently turned to the NAIC as the experts in the implementation of PPACA,” said PIA National Assistant Vice President for Regulatory Affairs David Eppstein. “In fact, the law specifically charges the NAIC with the task of defining the terms used in the medical loss ratio formula and establishing the methodology used for computing it. And HHS Secretary Kathleen Sebelius specifically requested the assistance of the NAIC in defining what is included in medical loss ratios (MLR), in a letter to the NAIC on April 12, 2010. That’s why we find it inexplicable that HHS has chosen to ignore and dismiss the input of the NAIC.”

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.

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