Regulators have to figure out how to handle health carriers that offer more than one type of health plan when they implement the new minimum medical loss ratio rules.
The Patient Protection and Affordable Care Act (PPACA), part of the federal Affordable Care Act package, will require the MLR, or percentage of health coverage premium revenue spent on health care and quality improvement efforts, to be at least 80% for individual and small group health coverage and 85% for large group coverage.
If administrative costs are too high, insurers or employer-sponsored health plans are supposed to provide rebates.
The PPACA Actuarial Subgroup of the Accident and Health Working Group, an arm of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has been dealing with questions such as the precise definitions of the factors to be used in MLR calculations.
Another issue has been the rules that should govern carriers that offer several different types of plans, such as a conventional health maintenance organization plan, a conventional preferred provider organization (PPO) plan and a high-deductible PPO plan.