HHS Issues Final Rules on MLR Notices for those Not Receiving Rebates

May 14, 2012

HHS Issues Final Rules on MLR Notices for those Not Receiving Rebates

Overview of MLR Rebates

  • Beginning this year, insurers and HMOs must provide annual rebates to policyholders if their MLR (percent of premium spent on claims/medical care) is less than 85 percent for large groups and 80 percent for small groups or individuals.

  • Rebate checks and notices to those receiving a rebate must be sent by August 1, 2012. There was an open question about whether notices would need to be sent to those not receiving rebates.

  • HHS had previously provided a detailed draft notice including specific MLR information for those not receiving rebates. This new, less detailed notice replaces the earlier one.

 

On May 11, 2012, the Department of Health and Human Services (HHS) issued final rules on the Medical Loss Ratio (MLR) rebate notices for policyholders and subscribers who are not receiving rebates.

Insurance companies and HMOs will not be required to communicate their specific MLR percent to those who are not receiving rebates. Instead, they must issue a new notice that says they have met or exceeded the minimum MLR standard. Policyholders and individuals who receive these notices will be directed to www.HealthCare.gov* for information about their insurer's actual MLR.

The notice to those not receiving rebates is required only for the 2011 rebates that will be issued in 2012. The purpose of sending it this year is to help educate consumers about MLR and direct them to the www.HealthCare.gov* website for MLR information.

The notice must be provided with the first plan document (for example, open enrollment material) that is provided to enrollees on or after July 1, 2012. It may also be provided electronically.

This notice is not required for expatriate or mini-med policies where no rebate is due. In addition, for groups of policies with fewer than 1,000 participants where there is not enough credible data to determine if the MLR standard has been met, this notice is not required.

A copy of the new notice (Notice #4) is available at http://cciio.cms.gov/resources/other/index.html#mlr*