In June, a taskforce of the National Association of Insurance Commissioners (NAIC) voted to support HR 1206 by Rep. Mike Rogers (R-Mich.) to exempt broker commissions from the MLR calculation.  Since then, however, the issue appears to have lost steam within the NAIC. NAIC President-Elect and Florida Insurance Commissioner Kevin McCarty, who chairs the task force and backed the bill, acknowledged that "while we may be supportive of the Rogers bill in the task force, we have to be realistic about the opportunity of it becoming law."

HR 1206 has nearly 100 co-sponsors, but it is actively opposed by consumer groups and prominent Democrats.  With Democratic opposition and many other issues to address, broker commissions is not a top priority for Congress.  Furthermore, the Department of Health and Human Services has taken the position that they are merely implementing the law, and there is nothing they can do.

States, however, have ultimate authority over brokers and agents and many appear willing to exercise this power to ensure that the matter of broker compensation in the MLR is ultimately resolved.  Arkansas is considering a proposal to permit the agent or broker to collect a "compensation fee" directly from the client/group as a consultation fee.  Employer groups would pay brokers as consultants, and the insurance carrier essentially would act as a third-party clearinghouse.  By changing the relationship so that agents act as agents of the purchaser instead of as agents of insurers, commissions will not count as an administrative cost of the carrier.

While the Arkansas proposal is a more transparent arrangement, agents could still face reduced compensation when employers scrutinize and evaluate the cost of services.