FAQ's for Employers - I did not receive a rebate

Overview


4.1 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.”

4.2 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 the previous year in that state, and paid out $800,000 in claims and other health benefits for that plan in the previous year 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.

General


4.3 Q. Who is getting a rebate?

A. Eligible policyholders (individuals and group employers) with active coverage in the previous year, 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 that year. In general, the minimum MLR threshold is 80% for individual and small group customers.

4.4 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.

4.5 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.

4.6 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 September 30 each year if those plans didn’t meet MLR requirements for the previous year.


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

A. The federal government has set up a website: https://www.healthcare.gov/health-care-law-protections/rate-review/ Diagonal Arrow

4.8 Q. Will I receive a rebate next year?

A. At this time, we aren’t able to determine if you will receive a rebate next year or not. Future rebates are based on claims paid and premium received for each year and won’t be known until August of the following year. Any applicable rebates will be distributed by September 30 each year.

4.9 Q. How do I know if our plan is an ERISA plan?

A. Our assumption is that you are an ERISA group and we are following the ERISA guidelines. The only exception is if you are part of a church group.

4.10 Q. Why haven't I received a rebate?

A. If you didn’t receive a rebate, it’s most likely for one of the following reasons:
  • The MLR rebates may not apply to your type of insurance — MLR rebates only apply to individual major medical and group major medical insurance plans (except for group self-funded plans)
  • Assurant Health may have met the medical loss ratio standard for your state and type of insurance, which means a rebate is not owed for the previous year.

4.11 Q. I had no claims. Why didn’t I receive a rebate?

A. Rebates are not based on the personal claims activity of any individual. Rebates are based on overall health care claims activity that occurred in the previous year, and if applicable in additional previous years, for everybody in the state with the insurance policy to which the rebate applies.

Calculation


4.12 Q. How does an individual's claims activity affect individual rebates?

A. Rebates are not based on the personal claims activity of any individual. Rebates are based on overall health care claims activity that occurred in the previous year and if applicable in additional previous years for everybody in the state with the type of insurance policy to which the rebate applies.

4.13 Q. Why did my state apply for a lower ratio? This impacts my rebate.

A. Some states were concerned that meeting the 80% Medical Loss Ratio standard would destabilize the individual health insurance market and provide fewer choices for their residents. More information can be found here: https://www.healthcare.gov/health-care-law-protections/rate-review/ Diagonal Arrow

4.14 Q. Does the government calculate Assurant Health’s MLR, or is it calculated by Assurant Health?

A. Assurant Health calculates the rebate based on claims paid and premium received. We report this information to the U.S. Department of Health and Human Services (HHS) based on the guidelines they provide.

4.15 Q. Whether or not I receive a rebate, and how much that rebate is, is dependent on the group of policies that my policy is a part of. How is that group determined?

A. Parameters include:
  • Whether your policy is individual medical, small group or large group coverage
  • The state in which the policy is issued
  • The legal entity that underwrites and issues the policy — Assurant Health is the brand name for insurance underwritten and issued by Time Insurance Company, John Alden Life Insurance Company and Union Security Insurance Company

Premium Impact


4.16 Q. If Assurant Health pays out more than the 80% MLR, does that mean that instead of issuing a refund they can send me a bill for additional premium?

No. Your premium amount was set independently of the MLR.


Group Size


4.17 Q. How was my group size calculated?

A. Your specific group size was calculated based on the response from surveys we sent out in August, November and December of the previous year. If we did not receive a response, then we used information from applications, eligibility reviews, TEFRA (Tax Equity and Fiscal Responsibility Act of 1982) surveys, MLR surveys and/or full-time and part-time employee information previously provided.

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