Important Notice:  Immediate Action Required

You may have read our newsletter articles or notifications about minimum Medical Loss Ratio (MLR) Rebates. MLR rules only apply to fully-insured plans. Self-funded medical benefit plans are not subject to these requirements.

Under the Affordable Care Act (ACA), insurers are obligated to spend a minimum amount of the premium collected on medical claims or towards activities that improve health. Under the Medical Loss Ratio (MLR) rules, insurers in the large group market (100+ employees) must maintain a loss ratio of no less than 85%, while insurers in the individual and small group markets must maintain a loss ratio of no less than 80%. If the minimum standards are not satisfied, premium rebates must be provided to policyholders no later than August 1st.

Insurers are required by law to send both a check and a government-prescribed notification to plan participants who are owed rebates. With group insurance plans, the notifications are being sent to both plan members and employers. If a rebate is owed to you as a plan sponsor, the insurance carrier is required to notify each employee on your plan.  This is bound to prompt inquiries from employees to management and HR.   

While the notifications are being sent to both employers and plan participants, the rebate checks are being sent to employers, who will then be required to calculate and distribute the rebates owed to members.   

If you have been notified of or have received an MLR Rebate from your insurance carrier, please contact your McCart Group advisor to assist you. There are a number of rules that apply to various circumstances - the most important being that both the employee and employer portions of the premium rebate are combined into a single rebate check. Therefore, the amount owed each plan participant must be calculated accordingly.

Also reference The McCart Group's Compliance Issue Brief about:
How Employers Should Deal With Possible MLR Rebates from Carriers.

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.