HHS requires insurers cite reform law in rebate letter

Insurers have a few additional steps they must take when providing rebates to members for not meeting the health reform law's medical loss ratio (MLR) requirement.

In a new final rule issued Friday, the Department of Health & Human Services is requiring that insurers inform their members that the rebate checks are a result of the Obama administration's health reform law, reported The Wall Street Journal.

Insurers already are mandated to notify members about the provision--regardless of whether they meet the 80 percent to 85 percent threshold--and explain how their premium dollars were spent. HHS clarified that if insurers do meet the MLR requirement, they must explain why their members aren't receiving rebates in the first communication they have with members after July 1, according to a Health Affairs blog.

Along with the rule, HHS included a sample rebate letter that insurers can use as a template to notify members. The first paragraph of that letter must state: "This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act--the health reform law."

America's Health Insurance Plans (AHIP) criticized the new requirement. "We remain concerned that sending these notices is unnecessary and could increase administrative costs," AHIP spokesman Robert Zirkelbach told the WSJ.

A recent Kaiser Family Foundation report concluded that insurers will pay roughly $1.3 billion in rebates this year if the U.S. Supreme Court upholds the reform law next month, FierceHealthPayer previously reported.

To learn more:
- see the HHS MLR rule (.pdf) and sample rebate letter (.pdf)
- read the Wall Street Journal article (subscription required)
- see the Health Affairs blog