Replaced by section 10101 of the Manager’s Amendment. Requires plans offering individual or group coverage, including grandfathered plans, to report to HHS for each plan year the ratio of the incurred loss plus the loss adjustment expense (or change in contract reserves) to earned premiums. Reports are to be made public on the HHS website.
Starting January 1, 2011, requires an annual rebate to each enrollee if plans’ medical loss ratios (MLRs) are below 85 percent in the large group market and 80 percent in the small group or individual markets. Ratio is calculated based on clinical service expenditures – including activities to improve healthcare quality – compared with all other non-claims costs, excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for ACA risk adjustment, risk corridors and reinsurance. Rebate amount, if applicable, is based on the difference between the plan’s actual and required MLR. Allows States to set higher MLR thresholds by regulation.
For the individual market, enables HHS to adjust the percentage with respect to a State if HHS determines that applying the 80 percent MLR may destabilize the State’s individual market. Bases MLR calculations, beginning January 1, 2014, on 3 years’ worth of data. Directs the NAIC, subject to HHS certification to establish uniform definitions and standardized methodologies to facilitate the MLR calculation. Separately, requires U.S. hospitals annually to establish, update and make public a list of hospital standard charges.