News & Updates
As you know, the Affordable Care Act sets rules on how much plans spend each year on medical care and activities that improve quality. These are the medical loss ratio, or MLR requirements. If a minimum amount is not spent, the issuer/ insurer must provide a rebate. The minimum required is different for plans that the government considers Small Group and Large Group, so Aetna needs to make sure they are placing each group in the correct category.
The federal government also issued a final rule on the MLR requirements on December 2, 2011. The final rule changed how, among other things, issuers/insurers must distribute MLR rebates. Aetna has summarized the final guidelines in their latest Eye on Implementation communication.
Following is information about how Aetna will request information from plan sponsors (policyholders) and communicate with them about MLR rebates.
Groups with 200 or fewer lives
On February 3, Aetna will mail letters to all plan sponsors with 200 or fewer enrolled employees, requesting their total average employee (TAE) count for 2011. Aetna will use this information to place the plan sponsor in the correct pool (Large Group or Small Group) for calculation of MLR for the 2012 experience year.
This mailing is similar to the letter Aetna sent to customers of this size in 2011 to collect 2010 total average employee count, to support the process for the 2011 experience year. Plan sponsors will have the option to respond through an online portal (which can be accessed through aetna.com), or mail back a paper response. Aetna is asking them to respond by March 31.
Non-government groups that are not subject to ERISA
As outlined in the final rule, insurers generally must issue the entire amount of rebates to policyholders rather than to subscribers. There are several exceptions to this approach, including non-ERISA, non-government plans and terminated plans.
For non-ERISA, non-government active and terminated plans, in order to pay the rebate to the policyholder, insurers must collect written assurance that the policyholder will use the rebates according to the requirements of the final rule. Later in February, Aetna will send a letter to these plan sponsors in MLR pools that are in or near rebate status. The letter will request written assurance that they will distribute rebates consistent with the final rule. If written assurance is not received, rebates will be divided equally among subscribers that were on the plan during 2011.
Former Aetna plan sponsors
If a rebate-eligible plan sponsor has terminated from Aetna, they will determine if current contact information is available. If the policyholder cannot be located, Aetna is required to distribute the entire amount of the rebate to subscribers.
Plan sponsors that are due a rebate
In the spring of 2012, Aetna will send letters to rebate-eligible plan sponsors, to provide a regulatory overview. This document will provide plan sponsors an overview of the federal guidance, as they will be responsible for the distribution of rebates.
In May, Aetna will have confirmation of the MLR pools in rebate position and can determine which plan sponsors will actually receive rebates. Aetna will then the rebate calculation and distribution process.
By August 1, Aetna will send notices of rebate to all plan sponsors that will receive rebates, and to their plan subscribers. Aetna will also issue rebate checks to plan sponsors and, where required, to individual subscribers by August 1, 2012.
Responding to questions
If you have questions about these mailings, please contact your Aetna representative.