Today’s the day . . . your MLR report is due to HHS

Ahhh, June 1^st. It’s a lovely day. It’s a Friday, and the official start of summer is just a few weeks away. But is there something else going on today? It’s not a holiday or my birthday (if it’s yours, Happy Birthday!). 

Oh, that’s right! June 1 is the date the medical loss ratio (MLR) annual report is due to the Department of Health and Human Services (HHS). If this reporting requirement applies to you (and it does if you are an insurer offering group or individual health insurance or if you are a group health plan (but not if you are a self-funded plan)), you’d better stop reading this and get cracking on filling out the reporting form. Here’s a handy link to the 58 pages of instructions.

Note that “mini-med” plans (policies that have a total annual limit of $250,000 or less) and expatriate plans must submit quarterly filings. In addition, an issuer of only excepted benefits is not subject to the MLR filing requirements, according to Q&As issued last week.

Yes, it's due today! If you were hoping for an extension of the June 1 deadline, you're out of luck. The Centers for Medicare & Medicaid Services (CMS) confirmed earlier this week in

Technical Guidance (CCIIO 2012—004) that the June 1 deadline will not be extended.

What has to be reported? In case you’ve forgotten, Public Health Service Act (PHSA) Sec. 2718, as added by the Patient Protection and Affordable Care Act (ACA), requires health insurers offering group or individual insurance coverage and group health plans to provide annual reports concerning the proportion of premiums that go to providing benefits. The report must identify the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums. Issuers and plans must provide annual rebates of excess costs to their enrollees.

The report must include the percentage of total premium revenue that such coverage expends on the following:

1.      reimbursement for clinical services,

2.      activities that improve health care quality,

3.      all other non-claims costs, including an explanation of the nature of such costs, and

4.      federal and state taxes and licensing or regulatory fees.

What’s the MLR? Under PHSA Sec. 2718, minimum loss ratios are established for large group plans, small group plans, and individual plans. The minimum loss ratio for large group plans (plans with 101 or more employees) is 85%, or a higher percentage if a state requires it. The minimum loss ratio for individuals and small group plans (plans with 100 or fewer employees) is 80%, or a higher percentage if a state requires it.

What if I don’t comply? I’m just the messenger, but you should know that HHS regulations provide for the imposition of civil monetary penalties if an issuer fails to comply with these reporting and rebate requirements. The civil monetary penalties provide for a penalty for each violation of $100 per entity, per day, per individual affected by the violation.

Why are you still reading this? I just told you about the possible penalties for noncompliance, so you better get to work! If you need help, click here and here for prior posts on MLR rules. If you’re not responsible for filling out an MLR annual report and you’d rather read about the rebate you might receive, click here instead.