Friends, family, staff and members of the association celebrated Marcia Moore's 25th Anniversary at KAIA. Thank you Marcia for your hard work and dedication to the Association.  Click here to view the photos on Facebook.

On Monday night Nov 29^th dueling amendments that would have repealed the onerous new 1099 reporting requirement failed to garner the votes for passage in the U.S. Senate. Each amendment proposed to do away with the reporting requirement completely. However the real issue was finding $17 billion to offset the "cost" of repeal, as this provision was originally passed to increase tax code compliance to partially offset the cost of the health care overhaul bill. The amendment by Senator Mike Johanns (R-NE) was offset by spending cuts and the amendment by Senator Max Baucus (D-MT) was not and would have added to the deficit. Additionally, because of procedural issues, each amendment had to gain 67 votes for passage under "suspension of the rules". The amendment by Senator Johanns fell 61-35 and the amendment by Senator Baucus fell 44-53.  

The good news is that it is clear that under normal circumstances a fully offset repeal of this provision has the support of enough Senators to pass, since 60 votes is usually the magic number as this overcomes a filibuster. However, unfortunately political games are still being played with this issue. There is still plenty of time for Congress to act, as the reporting requirement does not go into effect until 2012. Further action on this issue before the end of the year is unlikely. But rest assured this will be a front burner issue once the new, Republican controlled House of Representatives convenes in January and we expect action in both chambers next year with support from Republicans and many Democrats.

IIABA expressed disappointment with the interim final rule on Medical Loss Ratios released by the U.S. Department of Health and Human Services this week. The rule includes agent and broker commissions as "non-claims costs" when calculating an insurer's MLR as part of the new health care reform law. Throughout the process, the Big "I" has urged the National Association of Insurance Commissioners and the HHS to exclude agent commissions from the MLR calculation. IIABA has argued that these agent commissions are passed 100 percent to third parties and are therefore pass-through payments that should not be included in the formula. While acknowledging the potential impact of the MLR standard on agents and brokers and including that impact as a factor in considering whether a particular individual market would be destabilized, HHS did not appropriately exclude agent commissions and fees from the MLR calculations.

Agents and brokers in Kansas have begun receiving letters from health insurance carriers notifying them of cuts in commissions - sometimes as much as 50%.  The new commission rates could be likened to Medicare reimbursement rates for medical providers - so low it may not be worth the hassle. 

In addition, there will be fewer carriers offering coverage for the small group market as at least one company has determined it can no longer offer small group insurance in an effort to meet the MLR standard.  This news comes on top of the decision by most carriers to discontinue offering child-only policies.  Next up is for consideration - health insurance exchanges - though there may not be much of a marketplace left.  View the initial guidelines for the exchanges here. And there are more changes coming.  KAIA will have an update for you at the 2011 Rural and Small Conference - approved for 1 hour of Ethics.  Be sure to get registered!