Proposed Legislation Includes Broker Comp Disclosure


Legislation developed by Sen. Lamar Alexander (R-Tenn.), chair of the Health, Education, Labor, and Pensions (HELP) Committee, and ranking minority member Sen. Patty Murray (D-Wash.), includes a lengthy health insurance agent and broker compensation disclosure.

The sweeping health care legislation, S. 1895, the Lower Health Care Costs Act of 2019, also includes updates to the Employee Retirement Act of 1974 (ERISA) and provisions related to ending surprise medical bills, reducing prescription drug prices, and improving the U.S. public health system.

The health insurance compensation disclosure is part of the health care transparency section of the draft legislation, one of five featured sections. Other transparency provisions would ban anti-competitive insurance contract terms, prohibit price confidentiality clauses, establish rules for health plan provider directory accuracy, and require disclosure of information to ensure health plan enrollees know what their portion of their medical bills will be.

The producer comp disclosure, included in Section 308, runs about 15 pages in the draft bill. It would apply to any producer, agency, or other entity expected to earn more than $1,000 in direct or indirect compensation for selling or administering health coverage. It applies to compensation for benefits consulting, benefits administration, record keeping, providing stop-loss insurance, and selling coverage. The compensation disclosure takes effect two years following the law’s enactment.

Comments on the bill were due by June 5. A two-hour hearing took place on June 18. The HELP Committee voted 20-3 to support the measure on June 26. The three dissenting votes on the measure were from Sen. Rand Paul (R-Kentucky), Sen. Bernie Sanders (I-Vermont), and Sen. Elizabeth Warren (D-Massachusetts). Sanders and Warren are both in the race for the Democratic nomination for president in 2020. S. 1895 is expected to go to the full Senate for consideration in July.

The National Association of Health Underwriters (NAHU) supplied feedback to the HELP Committee for incorporation into the legislation. NAHU’s Marcy Buckner and Chris Hartman, both vice presidents of government affairs, discuss the legislation and feedback supplied to the committee in a NAHU podcast, which you can access here.

The insurance trade group Health Agents for America (HAFA) is encouraging brokers to call their U.S. senators to encourage elimination of the producer compensation provision from the proposed legislation.

Check back for future posts concerning further action on the measure.


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