Update on MLR impact on brokers

When the MLR rules placed broker commissions in the 15-20% “administrative” side of an insurer’s budget, industry experts predicted a large impact on broker revenue.

As a result, insurance companies have reduced agent commissions, in many cases by as much as 50%. A study conducted by the National Association of Insurance Financial Advisors (NAIFA) found that the MLR provision has forced many brokers to reduce the services they can provide to clients. Some are considering charging fees for those services, and in some cases, brokerages have laid off employees or had brokers leave the health insurance market altogether.¹

Some groups feel strongly that broker assistance is vital for employers and individuals who need personal advocates when choosing health coverage. They continue to lobby Congress to change the law, and bipartisan bills have been introduced in both the House and the Senate.

For more information on this aspect of the MLR rules, see our article “Final Rules count broker fees as overhead” on this website.