WASHINGTON—Insurance agent and broker groups criticized an interim final rule issued Monday that would include agent and broker commissions in calculating an insurer’s medical loss ratio under the new health care reform law.

The interim final rule by the Department of Health and Human Services implements the reform law’s medical loss ratio rules that require insurers underwriting individual and small-group coverage to spend at least 80% of their premium revenues on medical care, while insurers providing coverage to large groups must spend at least 85% on medical care.

The final interim rule does not provide a producer commission carve-out as sought by producer groups. Agents and brokers had sought to exclude their commissions from calculating insurers’ medical loss ratios.

The Washington-based Council of Insurance Agents & Brokers faulted the interim final rules.

“Overall, the framework creates a perverse disincentive to not find better or more efficient treatment protocols,” said Joel Wood, senior vp at the CIAB. “The larger the premium, the easier it is to reach 80% or 85%. This is the consequence of governmental price controls.”

The Independent Insurance Agents & Brokers of America also criticized the rule.

“The Big I is disappointed with the interim final MLR rule, and we are extremely concerned that this rule will lead to severe market disruption, especially in the individual and small-group markets,” Robert Rusbuldt, president and CEO of the Alexandria, Va.-based IIABA, said in a statement.

The IIABA said it had argued that commissions are passed on entirely to third parties and 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,” IIABA said in the statement.

Mr. Wood said finding a legislative fix for the rule would be a priority for the CIAB, but also said doing so would be “exceptionally difficult.”

“We do not expect wholesale changes can be achieved in the upcoming session, but a discreet measure of reforms is possible and could attain a large bipartisan vote in the Senate, and we hope MLR calculations can be included in such limited legislation,” Mr. Wood said.