May 25, 2021
Anthem will issue additional MLR rebates to Colorado Individual HMO members
Individual HMO members in Colorado will receive additional medical loss ratio (MLR) rebates due to recovery of funds from an April 2020 U.S. Supreme Court ruling.
Anthem will issue the rebates in May 2021.
Colorado Individual HMO rebates
On April 27, 2020, the U.S. Supreme Court ruled in favor of insurers in the Maine Community Health Options v. United States case. The case involved the Affordable Care Act’s (ACA) now-expired risk corridors program, which required the government to offset losses experienced by unprofitable health plans with the profits of profitable health plans. Due to the ruling, Anthem and other insurers received funds from the Centers for Medicare & Medicaid Services (CMS) in October 2020.
CMS requires insurers to factor the recovery funds into MLR rebates they previously issued. Anthem determined that it owes incremental MLR rebates to Individual HMO members in Colorado for the 2018 plan year. We will issue the rebate checks to approximately 44,000 members in May 2021 along with a brief cover letter and the required federal notice.
The rebates to impacted Colorado members average $28.
About MLR rebates
The ACA encourages health plans to spend most of the premium dollars they collect on healthcare costs rather than overhead. The ACA’s MLR provision requires plans in the fully insured Small Group and Individual markets to spend at least 80% of premium income on healthcare claims and quality improvement. In the fully insured Large Group market, it requires at least 85% of premium be spent on claims and quality improvement. 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.
If you have questions, please reach out to your Anthem representative.