Frequently Asked Questions (FAQ's) for Agents


6.1 Q: What is the Affordable Care Act?

A. The Affordable Care Act is a shortened name for the Patient Protection and Affordable Care Act (PPACA), a federal statute signed into law in March 2010 and commonly referred to as “health care reform.”

6.2 Q. What does “Medical Loss Ratio” mean?

A. The Medical Loss Ratio, or MLR, is the percentage of the total premium dollars received by a health insurance plan that is spent on health benefits (including claims and health improvement programs) for the plan’s customers in a particular state. For example, if an insurance company sold a plan called an “Individual Medical Red Plan,” and received $1,000,000 in premium payments from all customers with that plan in 2013 in that state, and paid out $800,000 in claims and other health benefits for that plan in 2013 in that state, the MLR would be 80% ($800,000 ÷ $1,000,000). The MLR consists of dollars spent on health benefits. Other costs incurred by the insurance company – administration, employee salaries, marketing, etc. – do not count toward the MLR.


6.3 Q. Who is getting a rebate?

A. Eligible policyholders (individuals and group employers) with active coverage in 2013, by insurance plans subject to the Affordable Care Act, will receive health care reform rebates if the insurance company didn’t meet the minimum Medical Loss Ratio (MLR) for 2013. In general, the minimum MLR threshold is 80% for individual and small group customers.

6.4 Q. What types of health insurance does the MLR rule apply to?

A. The MLR rule applies to major medical insurance plans for individuals, families, large groups and small groups, as dictated by health care reform.

6.5 Q. What types of health insurance are not affected by the MLR rebate?

A. The MLR does not apply to short-term (temporary) medical plans, self-funded group plans, supplemental coverage plans or fixed-benefit plans such as Assurant Health AccessSM.

6.6 Q. Do other health insurance companies have to send rebates?

A. All health insurers in the United States that sell plans subject to the Affordable Care Act have to send rebates by August 1, 2014 if those plans didn’t meet MLR requirements for 2013.

6.7 Q. Where can I find more information about the MLR?

A. The federal government has set up a website:

6.8 Q. Will my clients have to pay part of this rebate back to you if they cancel their policies?

A. No. The rebate is based solely on what your clients paid for premiums in 2013. It is not affected by any current year activity.

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