On April 10th, 2013, the U.S. Office of Personnel Management (OPM) Director of Healthcare and Insurance released an FEHB Program Carrier Letter outlining the ACA MLR procedures for FEHB insurance carriers and related entities. The Carrier Letter may be found here.
Under the ACA, all health insurance issuers—including FEHBP carriers—must submit MLR calculations to the Department of Health and Human Services (HHS) by June 1st. If an issuer does not satisfy the MLR requirements, that is, the percentage of premiums spent on reimbursement for clinical services and activities that improve health care quality does not meet the minimum standards for a given plan year, then it must issue rebates to policyholders by August 1st each year. OPM is the policyholder for FEHB plans.
Notice of MLR Calculation and Rebate to OPM
By June 1st, all FEHB carriers must provide notice to OPM’s Office of the Actuary about whether their ACA MLR calculation shows they may owe a rebate to OPM. Carriers must include ACA MLR rebates from subcontractors or other legal entities providing services under the FEHB contract. Carriers should notify OPM through the 2014 Rating Proposal, which includes a question about MLR rebates. If a carrier owes an MLR rebate, it must follow the instructions on the ACA MLR Submission Template, attached to the Carrier Letter as Attachment A.
If a carrier owes an ACA MLR rebate to OPM, it must issue one check for each plan option that fails to meet the ACA MLR threshold. Carriers are responsible for coordinating with their contractors and subcontractors to ensure OPM receives the ACA MLR information and any rebates owed by August 1st.
Starting with the 2015 reporting of 2014 plan information, the ACA MLR filing date will change from June 1st to July 31st and the ACA MLR rebate date will change from August 1st to September 30th to accommodate the premium stabilization program. For the 2013 and 2014 reporting, the deadlines described above will apply.
Errors in MLR Calculations
If a carrier discovers an error in its ACA MLR calculation that results in a rebate owed to OPM after June 1st and before August 1st, the carrier must immediately alert the Office of the Actuary via email and follow the Attachment A instructions to submit its rebate. If a carrier discovers an ACA MLR calculation error after August 1st, it must follow the same procedure.
The Carrier Letter also contains a recommended cover letter for carriers to send to enrollees about how the ACA MLR rebate will apply to the FEHB program as Attachment B. Carriers are to send this letter along with the standard rebate notice to enrollees.