Each year, health insurers must calculate their Medical Loss Ratio (MLR) for their fully insured individual, small group, and large group medical/Rx book of business in each state. If their 3-year average MLR shows the carrier collecting more in premium than is allowed under the Affordable Care Act (ACA), the excess for that state’s segment must be returned to policyholders (in the individual market) or plan sponsors (in the group market) by the following August.
The Kaiser Family Foundation (KFF) has analyzed data to estimate insurers are expected to issue $759 million in MLR rebates next month. The lion’s share (almost $525 million) will go to individual policyholders, leaving an estimated $121 million going to small group plan sponsors and $113 million to large group plan sponsors.
Employers receiving MLR rebates have a responsibility to determine how much might belong to plan participants (and former participants) and distribute what belongs to them within 90 days.
Applies to:
Employers with fully insured medical plans during one or more of the last three calendar years.
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