Medical Loss Ratio waivers: Keeping count
October 2011
One of the mandates of health care reform sets specific thresholds for the amount of premium dollars health insurers can allocate for non-benefit expenses, such as administrative and other non-medical costs. But the law also leaves room for exceptions, in cases where adhering to the Medical Loss Ratios (MLR) would disrupt the state’s insurance market.
The MLR requirement is 85% for large group plans and 80% for small group or individual plans.
As of October 17, 2011 the Department of Health and Human Services (HHS) had ruled on some, but not all, MLR waiver applications. Here is the latest count:
Full waivers granted:
Maine
Nevada
New Hampshire |
Applications pending:
Florida
Georgia
Indiana
Kansas
Louisiana
Michigan
North Carolina
Oklahoma
South Carolina
Texas
|
Partial waivers granted:
Iowa
Kentucky |
Waivers denied:
Delaware
North Dakota |
North Dakota’s waiver application was denied because the state’s three largest insurers are already meeting, or are very close to meeting, the target MLRs. According to HHS, this means the MLR requirement will not cause a state market disruption in North Dakota.
The partial waivers issued to Iowa and Kentucky allow them to apply lower thresholds than those specified in the reform mandate, but only for a limited time.
Impact on employers and employees — There is no direct impact. The waivers are not expected to result in changes in coverage.