What is a Medical Loss Ratio and Why Did My Health Plan Send Me a Notice About It?
July 27, 2012
On June 28, 2012, the United States Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA). ACA is being phased in over a number of years. A new requirement for 2013 is that your health plan must provide you with a notice about whether it met the minimum requirements for its medical loss ratio (MLR) for the prior contract year (i.e., 2011). All of the health plans met or exceeded the medical loss ratio requirements under ACA.
The ACA sets a minimum MLR of 85%. This means that for every $1 the plan collects in premium, $.85 must be used to pay claims or to improve health care quality. If the plan fails to meet the MLR, it must send a rebate to the insured members of the group who paid the premium.
You may receive a notice from your health plan by email or by U.S. Mail that discusses the MLR and the rebate. The language in the notice is quite technical and is informational only. You will not receive a rebate this year because your health plan met or exceeded the MLR requirement.
For more information on the impact of the ACA on your health insurance, please see the Patient Protection and Affordable Care Act: Its Impact on Your Benefits article.
Source: UW System Administration
Categories: Insurance