Answers to Frequently Asked Questions
What is the Medical Loss Ratio or “MLR”?
Federal (the Affordable Care Act) and Massachusetts (MA) state laws require that health insurance companies spend a minimum percentage of their policy holders’ premium dollar on medical expenses. Medical expenses are defined as not only the clinical care and services provided to the plan members but activities designed to improve healthcare quality as well.
This minimum percentage, or threshold, that health insurers must meet is called the Medical Loss Ratio (“MLR”). The MLR standard applies to health insurance plans offering group or individual coverage. It does not apply to self-insured plans.
When setting premium rates for each upcoming year, insurers must make calculated estimates based on the most current cost trends. Due to a number of factors, what’s projected often differs from what’s actually spent (as with setting household budgets.)
If your health insurer spent less on medical expenses than what was projected (the amount upon which your premium for the year ahead is based), the MLR requirement ensures the affected consumers receive money back on the unused portion of their premium.
Here are the MLR thresholds by market and state:
Will Harvard Pilgrim be issuing any 2019 rebates? If so, to whom?
Harvard Pilgrim offers plans under different licenses in different markets and states. Harvard Pilgrim will be issuing 2019 MLR rebates in limited markets. This grid shows where and how MLR rebates will apply for Harvard Pilgrim:
Note: The MLR Rebate applies only to the premiums under the Harvard Pilgrim Health Care license and does not apply to premiums under the HPHC Insurance Company license.
Will notices be sent?
Notices will be sent to all individuals and groups who will receive a rebate. Notices will also be sent to subscribers belonging to those groups receiving a rebate. Massachusetts state and/or federal MLR rebates and notification letters will be sent to employer groups and individuals, postmarked on or before September 30.
How and when will the rebates be issued?
Rebates will be issued either by credit reflected on the October invoice or by check mailed by September 30. Customers eligible for a rebate will see their premium credit reflected on the October invoice. If a rebate recipient is no longer a customer, a rebate check will be sent to the address on file.
Are my taxes affected by this rebate?
Rebates may have a tax impact both to plans receiving rebates and to consumers. Please consult with your financial and tax advisors regarding the tax impact of the rebate, or contact the IRS at (800.829.1040).
Additional MLR Rebate FAQ’s