Rotator_Meetings (2)
Issue Background

Protecting the Role of the Agent

Issue Resources

The Role of Agents, Brokers & Consultants

Value of Agents and Brokers

Brokers Making a Difference | Dedicated website to promote how agents and brokers are making a difference in the lives of their clients every day.

Medical Loss Ratio Requirements

The Impact of MLR | Myths & Realities

Current Regulation of Agents, Brokers and Consultants | Map by the NAIC detailing the licensing and continuing education requirements of agents and brokers by state.

The Role of Agents and Brokers in the Market for Health Insurance (2013) | The National Bureau of Economic Research (NBER) published a working paper on the value of agents and brokers in the insurance market.

Licensed health insurance agents, brokers, benefit specialists, and consultants play a vital role in the American healthcare system. Subject to strict state licensing laws and education requirements, they educate consumers on their health care coverage choices, help them select the most appropriate plans for their specific needs, design benefit plans, and design and implement cutting-edge health promotion and wellness programs. They also help employers comply with state and federal laws like PPACA, HIPAA, COBRA and ERISA, and explain coordination issues of public and private benefits to individuals and employees.

They do not work for insurance companies but instead own their own or work out of independent agencies, and are hired by individual consumers and employers to represent them before all of the insurance carriers with which the agent is affiliated. They are crucial to not only the health insurance enrollment process, but also in serving the health insurance coverage needs of individuals and employers after the point of sale by solving complex claims and billing issues and serve as consumer advocates if problems should arise.

A consumer may seek professional advice from an agent or broker at no additional cost. Agents are paid by small commissions included as a pass-through fee in every single health insurance policy premium payment. This payment structure has existed for over 100 years and is a consumer convenience, but it is also required by a myriad of state-level licensing, consumer-protection and tax laws.

One of the greatest threats to the security of licensed health insurance agents and brokers is the Medical Loss Ratio (MLR) Requirement of the Patient Protection and Affordable Care Act (PPACA), a provision designed to limit the amount that a health insurance company can spend on administrative costs. Unfortunately, the rules crafted to implement this requirement not only include independent agent and broker compensation in an insurer’s MLR calculation, but also classifies it as an administrative expense. In reality, health insurance agent and broker commissions have never been any part of the insurer’s bottom line. As a direct result of the MLR requirements, many agents are seeing a net reduction in business incomes of 30 to 50 percent. This means that fewer agents and brokers will be able to afford to stay in business, and many have begun reducing services to their clients and cutting jobs.

NAHU believes that Congress should take steps to ensure consumers have access to regulated professional benefit specialists by removing their compensatory stream of revenue from the MLR calculation. NAHU supports bi-partisan legislation that would remove agent and broker compensation from the MLR.

PPACA has dramatically changed the landscape of the nation’s health care system and will only continue to introduce new programs, measures and regulations for health insurance consumers to comply. For health care reform implementation to be successful, Congress must ensure that licensed health insurance agents, brokers and consultants continue to serve on the front lines as advocates and advisors to American health insurance consumers.

Write your legislator about supporting MLR legislation by filling out the form below and clicking "Submit".