CMS Issues Technical Guidance Confirming that Self-Insured Plans are Not Subject to Medical Loss Ratio Reporting Regulation
On April 20, 2012, the Centers for Medicare & Medicaid Services (“CMS”) issued Technical Guidance CCIIO 2012-02, which contains a set of Frequently Asked Questions (“FAQs”) regarding the PPACA’s requirement that health insurance insurers issue a Medical Loss Ratio Report (“MLR”) to the Secretary of HHS and provide rebates to enrollees if at least 80% (in the small group market) or 85% (in the large group market) of premium dollars are not spent on medical care or to improve the quality of medical care. The guidance confirms that self-insured plans are not subject to the MLR reporting requirement, while insured employer sponsored group health coverage and individual health insurance policies are subject to this requirement. Rebates may be paid as a check to the enrollee, or as a credit towards future premiums. Insurers are required to provide rebates for the policy period beginning January 1, 2011 by August 1, 2012.