Medical Loss Ratio (MLR) Information and FAQs

General Background: The Patient Protection and Affordable Care Act, also known as the Health Reform Law, was passed in 2010. One of the changes it brought to the health insurance world was the requirement for health insurers to spend specific target amounts of the premiums they receive on payments for the health care members utilize, as well as for projects that improve the quality of care members receive. When insurance companies spend less than those target amounts, the Affordable Care Act requires that those companies refund the difference between the amount that was spent and the specific target amount. This is known as the Medical Loss Ratio rule or MLR rule.

Applicability: The MLR requirements apply to most commercial health insurance plans, including most Direct Pay plans ("individual policies"), plans sponsored by self-employed entrepreneurs, small employers and large employers. Some plans excluded from the MLR are Medicare Plans, Medicaid Plans, Family Health Plus, Child Health Plus, and self-insured plans, among others.

EmblemHealth’s Responsibility: For members or groups that fall within one of the applicable MLR categories, EmblemHealth will issue a notice informing them of the MLR process and whether their plan met or did not meet the applicable MLR standard. If the applicable MLR standard was not met, rebates will be distributed according to federal instructions.

FAQs - For those members who did NOT receive a rebate:

1.	What is a medical loss ratio? The medical loss ratio is a calculation that divides the total dollars a plan spends on health care by the total dollars a plan receives in premiums. The result is the medical loss ratio or MLR.
2.	Who came up with the calculation method? This calculation method was established by the federal government.
3.	What is the "medical loss ratio rule"? Under the federal Affordable Care Act, health insurers must spend between 80 and 85 percent of the premiums they receive on payments for health care services and activities to improve health care quality. This is called the "medical loss ratio rule." In some states, health insurers must meet a higher or lower MLR. In New York State, health insurers in the individual and small group markets are required to spend at least 82 percent of the premiums they receive on health care services and activities to improve health care quality.
4.	How do I know if my group is a small group or a large group? For purposes of the MLR, small groups are defined as having 1 to 50 employees, based on figures collected during the previous calendar year. A group with more than 50 employees would be considered a large group.
5.	How do I determine my group size if I own my own business? Based on guidance from the federal government, if you have what is called a "sole proprietor" plan, then you are considered part of the individual market. If you own your own business but have small group coverage, then you are considered a small group.
6.	Are a specific number of employees required to be eligible for a rebate? No, there is no minimum or maximum group size for MLR rebate eligibility.
7.	Why didn’t I receive a rebate? The plan met the MLR threshold as dictated by the Affordable Care Act of 2010
8.	I know someone with EmblemHealth insurance who did receive a rebate, but I didn’t. Why is this? Please refer to the answer for question 7 above.
9.	Will I be notified every year of whether I’m entitled to a MLR rebate? The Affordable Care Act of 2010 established the MLR process. In 2012 health insurers were required to report MLRs and issue rebates under this law. Health insurers provided notices to members that belonged to plans that met the target MLR as well to members that belonged to plans that did not meet the target MLR. Beginning in 2013, health insurers are no longer required to notify non-eligible rebate members. Please visit www.healthcare.gov to find up-to-date health reform news.
10.	Where can I find more information? You can visit www.healthcare.gov to learn more about the medical loss ratio and health reform in general.

FAQs - For those members who DID receive a rebate:

1.	What is a medical loss ratio? The medical loss ratio is a calculation that divides the total dollars a plan spends on health care by the total dollars a plan receives in premiums. The result is the medical loss ratio or MLR.
2.	Why am I receiving this check? The Affordable Care Act of 2010 established the medical loss ratio (MLR) process. You are receiving a check because the MLR for the group of plans that includes your plan was below the target MLR set by the federal government. As a result, your insurer is issuing checks to the members of these plans or their employers.
3.	Who came up with the calculation method? This calculation method was established by the federal government.
4.	What is the “medical loss ratio rule”? Under the federal Affordable Care Act, health insurers must spend between 80 and 85 percent of the premiums they receive on payments for health care services and activities to improve health care quality. This is called the "medical loss ratio rule." In some states, health insurers must meet a higher or lower MLR. In New York State, health insurers in the individual and small group markets are required to spend at least 82 percent of the premiums they receive on health care services and activities to improve health care quality.
5.	How do I know if my group is a small group or a large group? For purposes of the MLR for a specific year, small groups are defined as having 1 to 50 employees, based on figures collected during the previous calendar year. A group with more than 50 employees would be considered a large group.
6.	How do I determine my group size if I own my own business? Based on guidance from the federal government, if you have what is called a “sole proprietor” plan, then you are considered part of the individual market. If you own your own business but have small group coverage, then you are considered a small group.
7.	Why did my employer receive the check instead of me? The regulation released by the federal government determines whether an employer or an individual member should receive the check. Based on this regulation, it was determined that the rebate for your plan would be sent to your employer.
8.	Why hasn’t my employer given me some of the money back? If your employer received the check, the employer must distribute the rebate in one of two ways: i. Reduce employees’ health insurance premiums for the upcoming year; or ii. Provide a cash rebate to the employees or subscribers who were covered by the plan on which the rebate is based. Other than reporting the requirements above, EmblemHealth cannot advise how your employer has proceeded or plans to proceed. If your employer has a Human Resources department, they may be able to give you more information.
9.	If a member or group terminated their EmblemHealth coverage at some point during the year, are they still eligible for a rebate? If a group or an individual had EmblemHealth coverage at any point during the year and are eligible to receive a rebate, we are required by the federal government to issue an MLR notice and rebate if applicable.
10.	How can I cash this check? You can cash this check at any bank or check-cashing venue. It is a standard check.
11.	Do I have to pay anything if I cash this check? Some locations may apply a fee for their check-cashing services. The check itself does not contain any fees or charges.
12.	Can I use the money for anything I choose? Did you receive the check yourself? If the check is made out to you, there are no restrictions on your use of the money. Did your employer receive the check? If your employer received the check, the employer must distribute the rebate in one of the two ways described in Question 8. You can verify who received the check by looking at the first sentence of the first paragraph of the rebate notice. If the check was issued to you, the notice will say, “This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums.” If the check was issued to your employer, the notice will say, “This letter is to inform you that (Your Health Insurance Company) will be rebating a portion of your health insurance premiums through your employer or group policy holder.”
13.	I have COBRA coverage and I received a notice saying that my employer would be receiving a rebate, but I received a check in the mail. Is this a mistake? Can I cash this check myself? This is not a mistake. Members who receive COBRA coverage were issued individual checks so you can cash the mailed check yourself.
14.	I don’t see a check in the envelope. This may be because the check was sent to your employer; the rebate can then be distributed by the employer. For more details on rebate distribution by an employer, please see question 8 above. You can verify who received a check by looking at the first sentence of the first paragraph of the rebate notice. If the check was issued to you, the notice will say, "This letter is to inform you that you will receive a rebate portion of your health insurance premiums." If the check was sent to your employer, the notice will say, “This letter is to inform you that (your insurer) will be rebating a portion of your health insurance premiums through your employer or group policy holder.” If a check was not included and the first sentence of the notice says, “This letter is to inform you that you will receive a rebate portion of your health insurance premiums,” please send a written notice to EmblemHealth requesting that we reissue your check. Include your name and member ID number, which can be found on your ID card. Once your request is received, you will not be able to cash your original check. You can send the request by mail or by fax: Address: EmblemHealth 55 Water Street Attn: Customer Service, 1st Floor New York, NY 10041-8190 Fax 212-510-4912
15.	I’ve lost or misplaced my check. What do I do? If you have lost or misplaced your check, please send a written notice to EmblemHealth requesting that we reissue your check. Include your name and member ID number, which can be found on your ID card. Once your request is received, you will not be able to cash your original check. You can send the request by mail or by fax: Address: EmblemHealth 55 Water Street Attn: Customer Service, 1st Floor New York, NY 10041-8190 Fax 212-510-4912
16.	How long will it take a check to be reissued after I send a written request? EmblemHealth cannot comment on how long the request will take to arrive in our offices if you decide to send your request by mail. Once we receive your request, whether by mail or fax, it will take between two and three weeks to issue a new check. Once your request has been processed, EmblemHealth will send the check to you by mail.
17.	Am I going to have to pay taxes on this money? EmblemHealth and its companies are not in a position to advise on tax matters. For more information, visit the section of the IRS Web site that deals with the Medical Loss Ratio. The IRS Web site is www.irs.gov.
18.	Was Emblem supposed to provide some kind of document for tax purposes? EmblemHealth is following the requirements of the Health Care Reform Law. Additional documentation has not been required.
19.	Where can I find more information? You can visit www.healthcare.gov to learn more about the medical loss ratio and health reform in general.

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