DOL

The Check’s in the Mail — MLR Premium Rebate Checks and What Do We Do with Them

Some BBG employer clients are reporting that they have received MLR rebate checks from their carrier.

What are MLR rebate checks and why do only some employers receive them?

Affordable Care Act rules stipulate that insurance carriers must spend a certain percentage of health insurance premiums on medical claims and other specified related activities. This is referred to as a Medical Loss Ratio (MLR).

The MLR ratio for small groups is 80/20, For large groups it’s 85/15.

If an insurance company spends less than the MLR amount designated by Obamacare then the insurance company must rebate the unspent portion back to the employer sponsoring the plan.

Wondering what to do if you are one of those employers receiving an MLR rebate check?

There are rules established by the Department of Labor governing distribution. Employers must use these as guide when allocating and distributing the rebate dollars. The rules can be found here http://dol.gov/ebsa/newsroom/tr11-04.html.

In a nutshell:

Employer groups are required to treat the rebate as a plan asset.  Uses may include, but are not limited to, reducing future premiums or premium increases, or rebating a portion back to the subscribers.  The rebate is required to be used for the benefit of the subscribers in one of the following ways:

• To reduce subscribers’ portion of the annual premium for the subsequent policy year for all subscribers covered under any group health policy offered by the plan;
• To reduce subscribers’ portion of the annual premium for the subsequent policy year for only those
subscribers covered by the group health policy on which the rebate was based; or
• To provide a cash refund only to the subscribers who were covered by the group health policy on which the rebate is based.

A more thorough review of what to do with MLR Rebate Checks can be found by clicking here How Employers Should Handle MLR Rebates

Clients can contact BBG for assistance.

Example Rebate Check

EMPLOYER REIMBURSEMENT OF INDIVIDUAL HEALTHPLAN PREMIUMS REMAINS A BANNED PRACTICE UNDER ACA

While this was more of a hot topic when the full monty of healthcare reform was implemented back in 2014, some employers perhaps unaware of the turmoil in the individual marketplace still ask about reimbursing employees for individual health insurance policies.

The IRS, the Department of Labor and Health and Human Services have all released several directives and guidelines that pretty clearly prohibit the practice. The most recent was issued in December 2015 (n-15-17).

“Dear Employer” Letter from Medicare (Part 2) – Compliance Overview

The CMS Data Match program determines whether an employer-sponsored group health plan has the responsibility for paying health care claims before Medicare. As discussed in last week’s post, with the number of workers age 65 and over steadily increasing, many employers are receiving letters from CMS asking for information about their employer-sponsored health coverage.  Employers are required to respond or be subject to penalties (fines).  This Compliance Overview summarizes these requests for information and highlights the corresponding steps for responding………………Medicare Secondary Payer IRS SSA CMS Data Match.

Medicare Secondary Payer IRS SSA CMS Data Match

 

Compliance in the Wild West

I wonder how much time and money employers have spent planning on the various dimensions of the Affordable Care Act (ACA) that died on the vine, have been changed, pushed back or remain so cloudy that no one really knows the correct answers. Do you think it’s enough to buy Las Vegas?

Compliance in the Wild West

I have seen so many changes that the only thing I really know is that the guy who tells you how it is all going to look and has the blueprint on EXACTLY what you should do right now is the guy I will bet against –  in Las Vegas or elsewhere.

So what should you do now about how to plan for the future and ensure you are compliant? That’s a very difficult question to answer. Here is what I think you should do:

  1. Don’t cave to fear mongers who say that prisons will be built all over the country to house ACA non-compliers. Compliance is important but so is having the courage to do the right thing for your employees.
  2. Remain aggressive on finding the best ways to take care of your people in the most cost-effective ways. If something is too edgy or pushes the edge of compliance, dump it. The ACA is a really big law and there is some wiggle room to think creatively.
  3. Any part of the law that is 12 months out may change. Avoid spending time on it now. If a brokerage house is hosting a seminar on a five-year plan, attend only if they are serving a fantastic free lunch.
  4. Keep asking good questions. The ACA rests on the understanding that American employers take good care of their people. Employers are going to be the ones to drive the innovation and provide the clear thinking on this law. If employers cave on providing health insurance solutions (even it is just guidance for their people) then the ACA is doomed. You should demand that everyone work hard thinking through the ACA and finding the best options possible.
  5. We have been deeply immersed in work with insurance advisory boards (of which BBG is a member), TPA experts at ODI and the federal regulators. It is believed among some that there will be an uptick in DOL audits. To that end, we at BBG are compiling all of the items an employer will need to provide. It is not a short list but we know what they will ask for and can step in to help. Our goal is to let you run your business and let us help with the things that you don’t do everyday (like provide cert to the DOL). Who knows if the DOL and other agencies will audit more groups, but if they do we will be ready to help.
Bonus (6).  Don’t worry about this stuff in August. Washington is on vacation, so I don’t think they are!
Facebook Iconfacebook like buttonTwitter Icontwitter follow buttonVisit Our LinkedIN Profile