July 2012 Health Care Reform
Posted on: July 11, 2012Categories: HR & ComplianceHow employers Should Handle MLR Rebates
The Affordable Care Act (ACA) requires health insurance issuers to spend a minimum percentage of their premium dollars on medical care and health care quality improvement. This percentage, or medical loss ratio (MLR), is 85 percent for issuers in the large group market and 80 percent for issuers in the small and individual group markets. Issuers that do not meet the applicable MLR standard must provide rebates to consumers.
The MLR requirements, which are enforced by the Department of Health and Human Services (HHS), became effective for issuers in 2011. Rebates must be paid by August 1 following the end of the MLR reporting year. Thus, issuers are required to pay rebates by Aug. 1, 2012, based on their 2011 MLRs.
Employers with insured group health plans may receive rebates this summer based on their issuer’s 2011 MLR data. Issuers were required to submit their 2011 MLR reports to HHS by June 1, 2012, so they may already know whether they will be issuing rebates by Aug. 1, 2012. Employers that expect to receive rebates should become familiar with the MLR rebate rules and should decide how they will administer the rebates. For assistance with rebates, please contact your Clarke & Company Benefits, LLC representative.
Click here for The Department of Labor’s Technical Release, 2011-04
Click here for additional MLR guidance
Click here to read Clarke & Company Benefits’ Legislative Brief
For additional guidance, please contact your Clarke & Company Benefits, LLC representative.
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