On Dec. 7, the Centers for Medicare & Medicaid Services (CMS) issued final regulations on the medical loss ratio (MLR) requirements in the Patient Protection and Affordable Care Act that requires health insurance companies to spend at least 80 percent of individual and small group plan premiums on medical claims or quality improvements rather than administrative costs, and at least 85 percent of large group premiums.  The rule takes effect Jan. 1, 2012.

As written, the rule includes agent commissions in the 20% or 15%  for administrative costs which has resulted in lower agent commissions, thus threatening the livelihood of thousands of agents.  The National Association of Insurance and Financial Advisors (NAIFA) continues to advocate that agent commissions not be included in the MLR requirements.