Landrieu, Isakson Introduce Bill to Protect Small Insurance Agents, Consumers

Press Release

U.S. Senator Mary L. Landrieu, D-La., chair of the Senate Committee on Small Business and Entrepreneurship, and Sen. Johnny Isakson, R-Ga., have introduced S. 2068, the Access to Independent Health Insurance Advisors Act. This legislation will ensure that health insurance agents and brokers can continue to provide essential counseling and advocacy services to consumers looking for the right health insurance coverage. Sens. Lisa Murkowski, R-Alaska, and Ben Nelson, D-Neb., are also cosponsors of the legislation.

This legislation addresses a provision of the Affordable Care Act known as the medical loss ratio (MLR) that has had dramatic, unintended consequences for nearly a half million licensed independent agents and brokers, and their employees. Due to the Department of Health and Human Services' (HHS) interpretation of the MLR provisions in the health reform law, health insurance carriers are required to treat agent and broker commissions as part of their administrative costs. This threatens the ability of independent agents and brokers to stay in business and serve the public. S. 2068 excludes from the MLR compensation earned by independent agents and brokers that serve the individual and small group markets.

"I am concerned that HHS's interpretation of the health care law threatens the ability of insurance agents and brokers -- many of whom are one- or two-person small businesses --to continue providing essential services to consumers who depend on them to assist with coverage or claims problems. Many brokers are being forced to reduce client services or close their doors altogether due to unintended consequences of these regulations," Sen. Landrieu said. "This is about strengthening the Affordable Care Act and ensuring that these small independent firms can stay in business and continue to provide critical services to consumers."

"I am proud to join my Senate colleagues in a bipartisan fashion to put forth a proposal that will allow insurance agents and brokers to continue to provide an important service to American consumers who are navigating the market to buy health insurance," Sen. Isakson said. "Our legislation will allow health insurance agents and brokers to continue assisting consumers in finding the best health coverage to meet their needs. Our proposal is a commonsense, bipartisan solution that will go a long way in benefitting the American health care system."

This legislation is supported by the National Association of Health Underwriters (NAHU), the Independent Insurance Agents & Brokers of America (IIABA) and the National Association of Insurance and Financial Advisors (NAIFA).

"We applaud Senators Mary Landrieu and Johnny Isakson on their bipartisan effort to listen to the needs of the American people concerning job loss and the economy. Millions of individuals and small businesses depend on licensed agents and brokers to help them navigate the health care marketplace and find health plans that suit their needs and budgets," Janet Trautwein, CEO of NAHU said. "The Access to Independent Health Insurance Advisors Act of 2012 ensures that health insurance agents and brokers will continue to be able to assist consumers find appropriate health insurance coverage, as well as use that coverage most effectively once it is purchased."

"We are extremely grateful to Senators Landrieu and Isakson for filing this bill as it would provide agents relief from the MLR regulation which has resulted in devastating consequences for our small business members," Robert Rusbuldt, president and CEO of IIABA said. "We urge both Senate and House leadership to quickly act on the Landrieu-Isakson legislation and the companion Rogers-Barrow legislation that is pending in the House of Representatives."

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