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MLR Final Rule Keeps Broker Fees as Administrative Costs

Margaret Dick Tocknell, for HealthLeaders Media, December 5, 2011

The final rule doesn't address the controversy; it just maintains the calculation of administrative costs included in the interim rule.

In anticipation of this outcome, Rep. Mike Rogers (R-MI) and John Darrow (D-GA) introduced HR 1206, which would exclude agent and broker compensation from the MLR calculation. On Friday the NAHU issued a press statement asking Congress to pass HR 1206.

The bill has 140 co-sponsors and is assigned to the House Energy and Commerce Committee's sub-committee on health, which held hearings on the matter last summer and has been waiting for the final rule before taking any action. In an e-mail statement to HealthLeaders Media Rep. Joe Pitts (R-PA), who chairs the sub-committee, left little doubt where he stands. "The final rule does nothing to address the jobs crushing effects of the regulation on the agent and broker community. In addition, we've heard at hearings dire warnings of how the IFR (interim final report) will damage healthcare quality and promote fraud in our system. The final rule issued by HHS cements these flawed policies into law."

In addition to defining administrative costs the final MLR rule makes these modifications based on public comments:

  • Requires that consumers receive an explanation of their rebate, including how it was calculated.
  • Makes tax free any MLR rebate received by consumers
  • Allows the special circumstances adjustment for so-called "mini-med" plans to be phased out rather than abruptly halted
  • Bans mini-med plans starting in 2014.

See also:
Understanding MLR Waiver Requests
4 States Await Word on MLR Waiver Requests


Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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