Medical Loss Ratio – Year Two

The Medical Loss Ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA) sets minimum percentages (82% – 85%) that carriers must spend on medical costs and quality improvement activities. Carriers file reports with the federal government detailing whether or not they have met the minimum threshold.

Last year, carriers were required to send notices about the MLR to employers and individual members whether or not they have met the minimum threshold. This year, the notice requirement is only for those who have NOT met the minimum and will be distributing refund checks by August 2013.

Because these funds are plan assets, there are regulations on how the funds can be used. If you do receive a refund check from your carrier this summer, please notify Austin & Co. Inc. so we can provide general guidance on how to proceed. For specific guidance on how to handle your rebate, we recommend you seek the advice of your legal counsel.