Bill H.R. 4575 would remove broker compensation from the medical loss ratio (MLR) calculation in the individual and small group markets.
On Wednesday, Representatives Billy Long (R-MO) and Kurt Schrader (D-OR) announced the introduction of H.R. 4575, which would remove broker compensation from the medical loss ratio (MLR) calculation in the individual and small group markets. This bill marks the fourth iteration of the broker bill in the Senate, and the first time that the House and Senate versions will be true companions with the same language to treat broker commissions as a pass-through expense. The Senate companion legislation is forthcoming and will be led by Senators Johnny Isakson (R-GA) and Chris Coons (D-DE). Along with the legislation, we are actively in discussion with Trump Administration officials to provide greater flexibility in interpreting the federal statute with regards to broker commission.
The MLR requirements were designed to limit how much insurance companies can spend on administrative costs. Unfortunately, the way the requirements were crafted, independent insurance agent and broker commissions are included as an insurer administrative cost. MLR requirements began on January 1, 2011, and immediately had devastating impacts on the insurance markets. This legislation would help correct the market and commission problems caused by the MLR requirements and improve consumer access to health insurance agents and brokers.
NAHU will be sending an Operation Shout on these bills shortly, and we encourage you to help spread the message of the importance of the legislation by contacting your representative and senators and asking them to co-sponsor and vote for these important reforms.
NAHU members can register for Operation Shout updates by clicking here.