ACA Now

Implementation Status

CCIIO provides an overview of this provision and links to related implementation details here, including an inventory of regulations and guidance and fact sheets and FAQs.

The Healthcare.gov website includes a consumer-oriented primer on MLR requirements and rebates.

Also note that on October 27, 2010, the NAIC transmitted the statutorily required uniform definitions and standard methodologies for medical loss ratios to HHS.

Additionally, in 2012, the IRS released a Q&A regarding the federal tax implications for health insurers that issue rebates as well as for policyholders that receive them.

2013

On February 15, 2013, CMS released a report, “The 80/20 Rule: How Insurers Spend Your Health Insurance Premiums.”

HHS’s March 11, 2013, final rule – the Notice of Benefit and Payment Parameters for 2014 – includes provisions that extend the annual MLR reporting deadline from June 1 to July 31 and the rebate disbursement deadline from August 1 to September 30 to take into account the impact of the premium stabilization programs, the impact of which on the MLR calculation also is addressed in the rule. Also see an accompanying fact sheet.

On March 29, 2013, CCIIO released instructions for the 2012 MLR reporting year; the agency also posted two Excel-based documents related to this filing: the Annual Reporting Form and the Formula Tool.

On April 5, 2013, CCIIO posted technical guidance presenting Q&As on MLR reporting and rebate issues, including ACA fees, aggregation of data and closed blocks of business.

In a development related to this section’s provision regarding hospitals’ publicizing a list of standard hospital charges, on May 8, HHS announced that it is making healthcare pricing data – specifically, hospital charges for common inpatient services – available online on CMS’s website here and here. The data include hospital-specific charges for the more than 3,000 Medicare IPPS hospitals for the top 100 most frequently billed discharges by MS-DRG for FY 2011. A CMS press release is available here.

On May 30, CCIIO posted technical guidance in which CCIIO clarifies that issuers of certain policies – as elaborated in the guidance — marketed as fixed indemnity insurance “do not need to report the experience of these policies for the 2012 MLR reporting.”

On June 20, HHS released a new report finding that nationwide, almost 80 million consumers saved $3.4 billion on their premiums due to the ACA’s medical loss ratio (MLR) provisions. Additionally, HHS estimates that consumers will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of around $100 per family.

In a development related to this section’s additional provision regarding hospitals’ publicizing a list of standard hospital charges — and following the release of similar inpatient data in May – HHS on June 3 released national and state-level hospital outpatient data for CY 2011 (see here), including estimates for average charges for 30 types of hospital outpatient procedures from hospitals nationwide. Hospital charges and price transparency more broadly were discussed at a Senate Finance Committee hearing on June 18; materials are available here.

On July 2, CCIIO released technical guidance regarding medical loss ratio reporting and rebate requirements noting that “[i]ssuers may exclude ACA assessments or fees from MLR calculations for a reporting year only if such assessments or fees were incurred in that reporting year.” The Q&A notes, for example, such ACA fees as those delineated at section 9010 (health insurer excise tax).

On August 1, CCIIO posted medical loss ratio (MLR) data from the 2012 reporting year, including MLR Rebates by State and Market for 2012, List of Insurers Owing Rebates for 2012 and – in ZIP file format – a Public Use File for 2012 (with MLR-reportable, insurance company-submitted raw data from 2012). All data are as of August 1, 2013.

On Nov. 22, CMS posted a Paperwork Reduction Act Package pertaining to “Medical Loss Ratio Annual Reports, MLR Notices and Record keeping Requirements,” including the annual reporting form and instructions for the 2013 filing year.

On Dec. 30, CCIIO clarified that insurers can, under specified conditions, “defer including in their MLR and rebate calculations the portion of 2013 premiums collected for 2014 ACA assessments or fees on non-calendar year policies.”

2014

On Jan. 30, CMS requested comments on (due on or around Feb. 30) on a proposed revision to the currently OMB-approved Annual MLR and Rebate Calculation Report and MLR Rebate Notices, which were revised following an earlier comment period; see #1 here.

On March 25, CCIIO released a Medical Loss Ratio 2013 Calculator and Formula Tool (Excel document) and accompanying system validations for the 2013 reporting year (PDF).

On March 5, CCIIO issued the 2015 Notice of Benefits and Payment Parameters final rule (fact sheet). Among other provisions, it includes a “state-level adjustment in the risk corridors formula to account for the transitional policy’s [on canceled plans] effect on the expected 2014 risk pool in a way such that the program is projected to be budget neutral, with payments in equaling payments out, while helping to ensure that prices remain affordable in 2015 and beyond,” according to the agency. The rule also finalizes the 2015 benefit year open enrollment as Nov. 15, 2014, through Feb. 15, 2015 (versus the proposed January 15, 2015 end date).

On March 14, CCIIO posted a proposed rule on Marketplace and broader insurance market standards for “2015 and beyond.” Among other changes, CCIIO proposes “changing the limit on allowable administrative costs to 22 percent [from 20 percent] and the limit on profits to 5 percent [a 2 percentage point increase] in the risk corridors calculation, in recognition of the ongoing uncertainty and changes in the market in 2015,” adding that the agency “expect[s] to implement this change in a budget neutral way” and that the adjustment would be “applied uniformly in all States for 2015 to help additional transition costs and uncertainty.” Comments on the proposed rule are due on April 21.

On March 18, Rep. Black (R-TN) sent a letter to HHS inquiring about the impact of proposed modifications (see CCIIO’s March 14 proposed rule) to insurers’ medical loss ratio calculation, asking about the impact of the proposals on consumers out-of-pocket costs and whether the policy would be “reversed in 2016 and later years.” She indicates the “proposed rule change concerns me greatly.”

On May 21, 2014 at a Senate Commerce Committee hearing on medical loss ratio requirements, Senators debated whether ACA medical loss ratio (MLR) requirements were lowering healthcare costs or stifling competition and innovation. On May 14, CCIIO posted the latest version of the MLR formula tool (Excel file) for populating with relevant premium and claims data. The agency discusses, in the “start here” tab, instructions for using the document to perform and/or verify 2013 MLR and rebate calculations. However, CCIIO notes that the HIOS template must be used, as opposed to the CCIIO-posted version, in filing MLR data.

On May 16, 2014 CCIIO released a final rule on Marketplace and insurance market standards for “2015 and beyond,” (fact sheet; blog post) addressing prescription drug exception standards; risk corridor and medical loss ratio adjustments; SHOP Marketplaces’ implementation of employee choice; the use of standardized notices for coverage renewal or product discontinuation; and other issues.

On July 10, the GAO released a report (highlights) finding that “most [more than three quarters of] insurers met or exceeded the ACA MLR standards in 2011 and in 2012, and the median MLRs among all insurers were 88 percent.”

On July 24, 2014 CCIIO released a report citing the benefits of the ACA “80/20 rule,” or Medical Loss Ratio MLR insurer provisions, to roughly 78 million consumers nationwide with individual or group health coverage. The report notes that in 2013 alone, consumers saved roughly $4.1 billion on premiums – as a result of both estimated premium savings ($3.8 billion) and refunds ($330 million) – due to the MLR provisions. Assessing this data longitudinally, CCIIO found that, since 2011 when the MLR provisions went into effect, consumers received roughly $9 billion in premium savings as a result of these provisions. Also see an HHS release and state-specific data.