Insurers must credit health reform law in rebate letters

NEWS IN BRIEF — Posted May 28, 2012

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Despite insurers’ objections, the U.S. Dept. of Health and Human Services will require insurers to credit the Patient Protection and Affordable Care Act in letters they send customers regarding premium rebates.

Under the health system reform law, insurers are required to spend 80% of premiums in the individual and small group markets and 85% in the large group market on patient care, also known as the medical-loss ratio. In markets where they do not meet the minimum thresholds, insurers must send money back either to the individual or to the employer in cases where the company sponsors the plan. Those funds would be applied to future coverage.

After asking for public comments on a model letter to accompany those rebates, HHS released its final version May 11. The letter says the MLR minimum is a requirement under the health reform law, giving credit in a way some opponents had said was too political.

The department also said insurers will be required to notify consumers who do not receive a rebate that their insurer met the MLR minimum. Insurers oppose the MLR minimums in general, but argued against sending notices to customers who are not owed a rebate, because it would add to the administrative costs meant to be minimized by the rule.

Note: This item originally appeared at

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