The U.S. Department of Health and Human Services (HHS) has issued proposed notices that health insurance companies may use for compliance with the new Medical Loss Ratio (MLR) requirements under the Affordable Care Act. The new health care law mandates that health insurers, depending on the size of the insurance market, spend between 80 and 85% of premium revenue on reimbursement for clinical services or activities that improve health care quality, or provide a rebate to their enrollees. The rebates must be paid by August 1 of each year, beginning in 2012. The law also imposes certain reporting requirements for insurers. Interim final regulations on the MLR requirement were issued in November 2010. [link to entry: http://www.employeebenefitscounsel.com/2010/11/23/hhs-issues-medical-los... Final regulations on the MLR requirement, including its application to mini-med plans and distribution of rebates to enrollees in group health plans, were issued in December 2011. [link to entry: http://www.employeebenefitscounsel.com/2011/12/05/hhs-issues-final-rule-...

Specifically, the HHS has made available the following documents:

• The MLR Annual Reporting and Rebate Calculation [link: http://www.cms.gov/PaperworkReductionActof1995/PRAL/itemdetail.asp?filte... ]

• Notice to Subscribers in the Individual Market [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_notice_1_... ]

• Notice to Group Policyholders and Their Subscribers, Rebate Sent to the Policyholder [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_notice_2_... ]

• Notice to Subscribers of Group Policyholders, Rebate Sent to the Subscribers [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_notice_3_... ]

• Instructions for Notices 1, 2 and 3 [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_mlr_rebat... ]

• Sample Notice to Policyholders and Subscribers When MLR Standard is Met [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_notice_4_... ]

• Sample Instructions for Notice to Policyholders and Subscribers When MLR Standard is Met [link: http://cciio.cms.gov/resources/files/Files2/02172012/2012_0213_%20mlr_in... ]

In a press release, [link: http://www.hhs.gov/news/press/2012pres/02/20120216b.html] HHS Secretary Kathleen Sebelius said: ”With today's notice, we're taking a big step toward making insurers accountable to consumers. Some of these insurance companies have already changed their behavior by lowering premiums or spending more on medical care and quality improvement, while the remainder will need to refund this money to their customers this year.”

According to the press release, the HHS is seeking comments on these model notices, and “is considering requiring insurers notify consumers if their insurer did meet the 80/20 standard.”

More information on the MLR requirements can be found here. [link: http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html]