The Centers for Medicare & Medicaid Services (CMS) reports that consumers will receive more than $330 million from insurers that did not meet the medical loss ratio requirement for the 2013 policy year. Rebates must be paid by August 1, 2014. The report touts the success of the MLR rule, showing more consumers are insured
Medical Loss Ratios
Agent and Broker Costs Trigger Millions in MLR Rebates
By A. Xavier Baker on
Posted in Health Care Reform & ACA
The Government Accountability Office (GAO) agent and broker fees and commissions comprise the largest non-claims cost for insurers in the individual and group markets and, as such, trigger millions of medical loss ratio (MLR) rebates under the MLR rule. GAO published the report, titled Private Health Insurance Early Effects of Medical Loss Ratio Requirements and …
Treasury Dept. and IRS Release Guidance to Qualifying Healthcare Organizations Computing and Applying MLR
Posted on
Posted in Health Care Reform & ACA, Tax
The Treasury Department and the Internal Revenue Service released a final regulation providing guidance to Blue Cross and Blue Shield (and other qualifying healthcare organizations) on computing and applying the medical loss ratio (MLR) under Code Section 833(c)(5), which is effective as of January 7, 2013 and applies to tax years beginning after December 31, 2013. Under Code Section 833(c)(5), qualifying organizations (including Blue Cross and Blue Shield organizations) are provided with favorable income tax treatment, including: (1) treatment as stock insurance companies, (2) a special deduction under Code Section 833(b), and (3) the computation of unearned premium reserves based on 100 percent of unearned premiums under Code Section 832(b)(4). However, the Patient Protection and Affordable Care Act (ACA) added a provision to the Code, requiring that a qualifying organization must have a medical loss ratio (MLR) of at least 85 percent to get favorable income tax treatment under Code Section 833(c)(5). For purposes of Code Section 833, an organization’s MLR is its percentage of total premium revenue expended on reimbursement for clinical services provided to enrollees under its policies during such taxable year (as reported under Section 2718 of the Public Health Service Act (PHSA)).
Continue Reading Treasury Dept. and IRS Release Guidance to Qualifying Healthcare Organizations Computing and Applying MLR
HHS Issues Proposed Notice of Benefit and Payment Parameters for 2015; Includes Carve-out for Certain Self-insured, Self-administered Plans
Posted on
On November 25, 2013, the Department of Health and Human Services (HHS) released a Proposed Notice of Benefit and Payment Parameters for 2015 regarding the Affordable Care Act’s Transitional Reinsurance Program (TRP) fee.
The Proposed Notice includes the previously announced carve-outs from the TRP fee for the 2015 and 2016 years for certain self-insured, “self-administered” …
CMS Issues FAQ Guidance on Reporting Fixed Indemnity Policies
By Chris Cadena on
Posted in Health Care Reform & ACA
On May 30, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a “Frequently Asked Questions” document regarding MLR Reporting Requirements. The new question addresses so-called “fixed indemnity” policies that fail to meet the criteria for fixed indemnity policies under the Affordable Care Act Implementation FAQs from January 2013. The question asked whether issuers …
Medicare Advantage and Part D MLR Final Rule Issued
By Marisa E. Adelson on
Posted in Health Care Reform & ACA, Medicare
On May 20, 2013, the Centers for Medicare and Medicaid Services (CMS) released the final regulations on the Affordable Care Act’s (ACA) medical loss ratio (MLR) requirements for Medicare Advantage and Medicare Prescription Drug Benefit Programs (PDP). The final MLR rule is largely identical to the proposed rule and generally tracks the requirements of the …
FEHB Program Carrier Letter re Affordable Care Act (ACA) Medical Loss Ratios (MLR) in the Federal Employees Health Benefits (FEHB) Program
By A. Xavier Baker on
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…