HHS Releases Insurer Medical Loss Ratio Model Notices

Health and Human Services (HHS) Secretary Kathleen Sebelius announced that consumers will soon begin receiving unprecedented information on the value of their health insurance coverage, and some will receive rebates from insurance companies that spend less than 80 percent of their premium dollars on health care.

The Affordable Care Act requires insurance companies this year to begin notifying customers how much of their premiums they have spent on medical care and quality improvement. Beginning in 2011, insurers were required to spend at least 80 percent of total premium dollars they collect on medical care and quality improvement. Insurance companies that do not meet the 80/20 standard (also known as the Medical Loss Ratio) are required to pay rebates to their customers this year. 

HHS released proposed insurer notices for consumers about whether the insurance companies have met the new standard. For text of the proposed notices, please visit: http://cciio.cms.gov/resources/other/index.html#mlr. Look for the six proposed notices and instructions under "Notices on PRA Display" under the "Medical Loss Ratio Forms" section. HHS is seeking public comment to help ensure the notices are useful transparency tools for consumers.