Dear NAHU Members,

I just wanted to update all of you about the National Association of Insurance Commissioners (NAIC) activity that occurred yesterday regarding the MLR issue. As Florida Insurance Commissioner Kevin McCarty said in a statement issued yesterday, “There have been some inaccurate statements reported in the press regarding the NAIC’s Executive Committee meeting.” Some of our members have understandably expressed concern to us about the confusing news stories they have seen, so we want to make sure our entire membership has heard the facts of the matter.

As we mentioned in Monday’s Washington Update, the NAIC held a plenary committee call yesterday afternoon. The Plenary Committee is comprised of all of the commissioners and chaired by NAIC President and Iowa Insurance Commissioner Susan Voss. The committee held scheduled votes on several items, and it also heard a scheduled REPORT from Commissioner McCarty on the activities of the Professional Health Insurance Advisors Task Force’s recent endorsement of H.R. 1206, the bipartisan federal bill to remove agent and broker compensation from the MLR calculation. The Plenary Committee was never scheduled to vote on the endorsement yesterday, and so no vote was ever called. Please keep in mind that just because no vote was planned for yesterday that does not mean that there will not be further NAIC action on this issue in the future.

Also, much has been made by a question posed by the California commissioner to Commissioner McCarty during the call about whether or not the Task Force’s vote meant that the entire NAIC endorsed H.R. 1206. Commissioner McCarty answered that question honestly by saying, no it does not. The task force doesn’t speak for the NAIC as a whole, but its policy endorsement is a very significant step.

As Commissioner McCarty noted on the call, potential options for future NAIC action include consideration by the NAIC’S Government Relations (EX) Leadership Council (GRLC), which does has the ability to make legislative endorsements for the whole organization, or sending the matter to the NAIC’s plenary committee, so that all commissioners may vote. It is up to the NAIC’s Executive Committee to decide which path the NAIC will take. The NAIC as a whole almost never endorses federal legislation, particularly controversial health policy legislation. Their leadership is trying to figure out the best way to handle this within their own committee structure and they do not want to rush the process. We at NAHU respect and appreciate that position.

Like NAHU, in addition to considering federal legislation, the NAIC also publicly committed to working with HHS on a parallel track to address the agent/broker compensation issue on a regulatory basis. The NAIC’s ongoing efforts in this area were discussed at length on yesterday’s call. Many commissioners feel that the fastest path to MLR relief rests with HHS, both since the secretary has a great deal of statutory authority over PPACA implementation and since the current Congress hasn’t been quick to pass legislation lately on any matter. NAHU agrees. That is why we have asked Secretary Sebelius to either amend the current interim final rule interpreting the MLR requirement to properly classify agent and broker commissions as pass-through amounts and to exclude them from the overall MLR calculation, or issue an immediate hold on implementation and enforcement until these matters can be resolved by HHS and the states and/or Congress. That’s also why we truly appreciate the NAIC’s efforts to encourage an immediate regulatory solution through HHS.

What happened yesterday at the NAIC wasn’t a surprise, nor was it an unwelcome development. The insurance commissioners continue to work towards a resolution of this critical issue, as does NAHU, our fellow agent organizations and other coalition partners. Our efforts on the Hill and with HHS remain as steadfast as ever. We ask that all of our members keep up outreach with state insurance regulators, so that they will continue to support the valuable role that health insurance agents and brokers play in the private health insurance marketplace. We also strongly encourage all members to ask your lawmakers to join on to H.R. 1206. We now have more than 100 co-sponsors thanks to your hard work, but we are always looking for more!

If you have any questions about our government relations activities, or need more information, please do not hesitate to contact us.

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Ph. 703.276.0220 Fax 703.841.7797 http://www.nahu.org/		 National Association of
Health Underwriters