A National Association of Insurance Commissioner (NAIC) subgroup is getting into the finer details of implementing the Patient Protection and Affordable Care Act (PPACA) minimum medical loss ratio provisions.
PPACA, part of the federal Affordable Care Act package, will require insurers to spend 85% of large group health insurance premium revenue and 80% of individual and small group health premium revenue on health claims and quality improvement efforts.
The NAIC, Kansas City, Mo., is developing rules for calculating loss ratios and for compensating enrollees with rebates when the minimum MLR standards are violated.
Members of the NAIC’s PPACA Actuarial Subgroup of the Accident and Health Working Group held a conference call Monday that focused on issue resolution documents (IRDs) relating to questions that might arise when health insurers have too little claims data for the data to be considered actuarially “credible.”
The panel agreed to move consideration of three IRDs forward by classifying the IRDs as “preliminary resolutions” and formally exposing them for public comment.
IRD016 concerns treatment of reductions in rebates made to adjust for the fact that a carrier’s experience is not considered credible.
IRD029 proposes that new businesses with less than 12 months of experience should be included in the MLR calculation.
IRD071 proposes that rebates should be paid only to enrollees who were present during the last experience year.
Some panel members want insurers to defer rebate adjustments made due to lack of credible experience and others want the rebate adjustments to be forfeited.