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.
- For California Individual and Large Group HMO and PPO Plans in 2021, Health Net met or exceeded the Medical Loss Ratio (MLR) standards.
- For California Small Group Plans in 2021, Health Net Life Insurance Company (PPO) met or exceeded the 80 percent MLR standard. For California Small Group Plans in 2021, 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 2021 will receive a rebate of a portion of the premium as required under the ACA.
What This Means to Your Clients and You
Health Net is required to provide this rebate by September 30, 2022. Small Employer Groups who are eligible for a rebate will receive 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.