Anthem groups and Individual members in 10 states will receive 2020 medical loss ratio (MLR) rebates this year. Anthem will begin mailing the rebates by the end of August. This is the second year in a row Anthem mailed rebates a month earlier than the September 30 deadline.
The MLR provision of the Affordable Care Act (ACA) encourages health plans to spend most of the premium dollars they collect on healthcare costs rather than overhead. MLR is a ratio of insurance premiums to claims costs, usually expressed as a percentage.
In the Fully Insured Small Group and Individual markets, the MLR provision requires plans to spend at least 80% of premium income on healthcare claims and quality improvement. In the Fully Insured Large Group market, it requires plans to spend at least 85%. In markets where Anthem does not meet the minimum ratio, they are required to issue rebates to employer groups and Individual members. ASO plans and stop-loss insurance are excluded from the rebates.
Along with the rebate checks, Anthem will send employer groups and Individual members a federally mandated notice that explains MLR and how it is calculated.
Anthem is also required to notify employees of the groups that receive rebate checks.
ACA rules require that employers either distribute the rebate among their employees covered by the rebated plan or use it to lower premiums in the next plan year. Policyholders must distribute the rebates within three months of receiving them. Group plans that are subject to Employee Retirement Income Security Act (ERISA) laws may also use the rebate funds to pay current plan premiums.
View this FAQ for more details on the rebates.
Contact your Cornerstone representative with any questions.
