The Affordable Care Act (ACA) requires health carriers to maintain an Medical Loss Ratio (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.
For California Individual and Large Group Plans in 2019, Health Net met or exceeded the Medical Loss Ratio (MLR) standards.
For California Small Group Plans with PPO in 2019, Health Net Life Insurance Company met or exceeded the 80 percent MLR standard. California Small Group Plans with HMO in 2019, Health Net of California, Inc. did not meet the 80 percent MLR standard.
What This Means to Your Clients and You
Health Net is required to provide this rebate by September 30, 2020. Small Employer Groups with an active policy will have their rebate applied to their monthly premium due on or after September 30, 2020. Small Employer Groups who no longer have an active policy will receive a rebate check. The rebate amount and the method of rebate may vary by state, family size and/or amount of premium paid.
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 transaction.
For questions, please contact a member of your B&P Sales Team - 888.722.3373.