Groups and Individual members in 11 states (upstate / downstate) will receive 2021 medical loss ratio (MLR) rebates this year.
The MLR provision of the Affordable Care Act (ACA) encourages health plans to spend most of the premium dollars they collect on healthcare costs rather than overhead. MLR is a ratio of insurance premiums to claims costs, usually expressed as a percentage.
In the fully insured Small Group and Individual markets, New York plans are required to spend at least 82% of premium income on healthcare claims and quality improvement. In the fully insured Large Group market, it requires plans to spend at least 85%. In markets where we don’t meet the minimum ratio, we’re required to issue rebates to employer groups and individual members. ASO plans and stop-loss insurance are excluded from the rebates.
Along with the rebate checks, we will send employer groups and Individual members a federally mandated notice that explains MLR and how it is calculated.
We are also required to notify employees of the groups that receive rebate checks.
ACA rules require that employers either distribute the rebate among their employees covered by the rebated plan or use it to lower premiums in the next plan year. Policyholders must distribute the rebates within three months of receiving them. Group plans that are subject to Employee Retirement Income Security Act (ERISA) laws may also use the rebate funds to pay current plan premiums.
View the MLR Pulse page for more information.
Please reach out to your Empire representative if you have questions.