The National Association of Insurance Commissioners, Washington, D.C., recently approved a medical loss ratio reporting blank that contains broker commission costs into the administrative expense total – and brokers are reacting.
Based on the new requirements, administrative costs are limited to 15 percent for large plans and 20 percent for individuals and small groups. Starting in 2011, insurers that do not follow these provisions must issue refunds to those covered in their plans.
Though Alan Katz, principal of the Alan Katz Group, Los Angeles, isn't pleased with the NAIC's recent move – and never believed exempting commissions from the MLR would get far – he does not expect a complete solution anytime soon. Like many provisions of the Affordable Care Act, the new commission requirement is under examination.
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