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Agents and insurance companies say portion of health care law is hurting business

Naples insurance agent Mark Fiacable says a part of the federal health care act destroyed his business and caused him to lose his home.

Joan Galletta, who works at a Jacksonville insurance agency, says the same provision of the law led to staff cutbacks and a co-worker who left the industry because revenue decreased.

In Pompano Beach, insurance agent William Kohn says he can’t afford to hire an assistant, which is affecting the quality of service at his business.

They all blame their losses on a portion of the federal health care law that mandates insurance companies spend at least 80 percent of premium dollars from individual plans on medical costs. Companies that failed to meet the threshold in 2011 must issue rebates to customers this year.

In an attempt to reduce overhead costs to comply with the law, insurance companies are reducing agent commissions and eliminating referral fees, according to letters and emails state insurance regulators released Friday. These documents were sent to the federal government to support the state’s argument that it should be granted flexibility under the 80-20 rule, known as the medical loss ratio provision.

Some of the same arguments contained in the letters sent Friday have already been rejected by the federal government, which last month said it was rejecting the state's request for a waiver under the new rule. But Insurance Commissioner Kevin McCarty has asked the U.S. Department of Health and Human Services to reconsider.

Story here.