Health Net Finalizes 2018 through 2020 Off-Cycle Medical Loss Ratio (MLR) Results

The Affordable Care Act (ACA) requires health carriers to maintain an MLR of at least 80 percent for Individual and Small Group Plans and 85 percent for Large Group Plans. The MLR is the percentage of premium dollars a health plan spends on physician, hospital, and other medical services and activities that improve health care quality, including wellness programs.

This requirement is referred to as the MLR standard or the “80/20” or “85/15” rule. If those standards are not met, the Health Plan or Insurance Carrier must refund part of the premium. The MLR standard was created to provide more transparency and accountability around health care costs.

As a result of a review of the 2017, 2018, 2019, and 2020 MLR Annual Reporting Forms of Health Net of California, Inc., it was determined that Health Net of California, Inc. had to recalculate its MLR for those years and Health Net is providing affected groups with a premium rebate that is due as a result.

• For California Individual and Large Group HMO and PPO Plans in 2017, 2018, 2019, and 2020 Health Net met or exceeded the MLR standards.
• For California Small Group Plans in 2017, 2018, 2019, and 2020, Health Net Life Insurance Company (PPO) met or exceeded the 80 percent MLR standard.
• For California Small Group Plans in 2017, Health Net Insurance Company of California, Inc. (HMO) met or exceeded the 80 percent MLR standard.
• For California Small Group Plans in 2018, 2019, and 2020, Health Net of California, Inc. (HMO) did not meet the 80 percent MLR standard. 

This means that your Small Group Clients who had Health Net of California, Inc. HMO plans in 2018, 2019, and/or 2020 will receive a rebate of a portion of the premium as required under the ACA.

The rebates will include 10% interest from the date the rebates initially were due (September 30 following the end of the policy year) through when they are paid out. 

What This Means to Your Clients and You

Active or cancelled groups in 2018, 2019, and/ or 2020 subject to ERISA will have the MLR refund checks issued to the employer.

Active or cancelled groups in 2018, 2019, and/ or 2020 NOT subject to ERISA but signing attestation confirmation that the group will follow ACA guidelines regarding the handling of rebates, will have the checks issued to the employer.

Active or cancelled groups in 2018, 2019, and/ or 2020 NOT subject to ERISA AND not signing attestation confirmation that the group will follow ACA guidelines regarding the handling of rebates, will have the checks issued directly to the employee enrollees. 

There aren’t any changes to the current premium, deductible, or copay amounts as a result of the rebate. Broker commissions are also not affected by this rebate transaction.

Questions

Please contact your Health Net Account Manager or Small Group Account Management at 1-800-447-8812, option 2.