Tuesday, November 23, 2010

HHS releases guidance on health reform MLR requirement

On Monday, November 22nd, the Department of Health and Human Services (HHS) released regulations detailing the medical loss ratio (MLR) requirement of the Patient Protection and Affordable Care Act (PPACA). The MLR rule requires that insurance companies spend at least 80 cents per premium dollar on medical care and quality, 85 cents per premium dollar for large group plans.

The regulations follow the National Association of Insurance Commissioners recommendations on deducting federal and state taxes from the MLR. They also allow “mini-med” plans to follow a different calculation formula than other plans in 2011.

Insurance companies that do not meet the medical loss ratio standard will be required to provide rebates to customers, with the first round of rebates beginning in 2012.

For more information on the MLR rule, view the Medical Loss Ratio Fact Sheet or the HHS Regulations.

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