"NAHU urged the National Association of Insurance Commissioners and the Department of Health and Human Services to exclude agent commissions from the MLR calculation," said Janet Trautwein, NAHU CEO. "Since agent commissions are completely passed through to third parties, they should not be included in the formula.

"NAHU is extremely disappointed in this result because through this entire process, the NAIC, HHS and state insurance commissioners all repeatedly acknowledged the potentially negative impact that the MLR calculation could have on agents and brokers, as well as consumers' access to affordable health plans."

Terry K. Headley, president of the National Association of Insurance and Financial Advisors said while the MLR regulation is disappointing, it's not surprising.

"The regulations treat agent commissions as non-claims expenses and decline special treatment for such expenses," Headley said.

NAIFA, NAHU and IIABA are calling on Congress members to step in and fix the MLR language before final rules are implemented later this year.

"NAIFA will provide comments on the regulations and also will seek a bipartisan legislative approach in the 112th Congress to ensure professional, licensed and regulated agents can be fairly compensated for assisting consumers," Headley said.

When the National Association of Insurance Commissioners forwarded recommendations for MLR standards to HHS on Oct. 21, the group announced it would not exclude commissions and fees from the MLR formula, but would instead create a working group with HHS to address the impact health reform would have on agents and brokers, especially during the years leading up to 2014.

The subgroup consists of 17 insurance commissioners, including NAIC President and West Virginia Insurance Commissioner Jane Cline. The group has had "one call" with HHS, according to an NAIC spokesperson, who responded on Nov. 16 to an inquiry from Benefits Selling about the group. The spokesperson would not disclose details about the call.

In its explanation of interim MLR rules, HHS states, "the potential impact of the MLR standard on agents and brokers merits recognition, and in this regulation the impact of the MLR standard on agents and brokers will be a factor in considering whether a particular individual market would be destabilized."

The Department says Secretary Kathleen Sebelius will consider an adjustment to the MLR standard if consumers would be unable to access agents and brokers because their compensation has been reduced to the point that they are no longer available to assist in finding coverage, and other coverage options for consumers were limited.

"In its October 13th letter, the NAIC noted the important role that agents and brokers will play in the next four years as markets transition to Exchanges, and encouraged HHS to 'recognize the essential role served by producers and accommodate producer compensation arrangements in any MLR regulation promulgated.' This criterion recognizes that role," HHS said.

NAIFA's president says the group will be working with state associations to determine if pursuing a waiver is appropriate for that state. "Georgia, Iowa, Maine and South Carolina have already indicated to HHS their intent for a waiver," Headley said. "Florida and West Virginia are also expected to pursue the waiver application."