Legislative Update – Health Insurance Premium Rebates

MEDICAL LOSS RATIO REBATES Under PPACAs medical loss ratio MLR rules, health insurers must issue rebates if the insurer failed to meet the MLR percentages identified in PPACA. This means, unless at least 85% of each premium dollar or 80% in the small group and individual markets is spent on medical care, the carrier must issue rebates. The final guidelines, which were recently issued, require insurers to issue the rebate checks to the policyholder generally the employer. The insurance carriers have subsequently made the employer responsible for distributing the funds appropriately. Modifications in the final guidelines include:Employees in group health plans can receive rebates in a manner that is not taxable.A proposal that consumers receive a notice showing not only the amount of any rebate, but also the insurers MLR even if there is no rebate. It is anticipated that these will be published in the spring of 2012In 2011, limited medical plans received a special circumstances adjustment to their MLR in the form of a multiplier of 2.0 for 2011. The final rule phases it down from 1.75 in 2012 to 1.5 in 2013 and to 1.25 in 2014. Mini-med plans will not be allowed after 2014 due to the prohibition on annual limits for essential benefits.The final

via Legislative Update from Black, Gould & Associates.

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