Insurers may feel a bump when they start implementing the new minimum medical loss ratio rules, a regulator says.
The topic came up Monday during a teleconference on implementation of the minimum MLR section of the Patient Protection and Affordable Care Act (PPACA) that was organized by an arm of the Accident and Health Working Group at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.
The working group arm, the PPACA Actuarial Subgroup, held the session to review several minimum MLR issue resolution documents (IRDs).
Beginning in 2011, the minimum MLR provision in PPACA, a component of the new federal Affordable Care Act, will require health insurers to spend 85% of large group premium revenue and 80% of individual and small group premium revenue on health claims and quality improvement activities or else pay rebates to policyholders.
Insurers will use a 3-year average of medical loss ratios 
when calculating rebates, PPACA Actuarial Subgroup members say.
The subgroup is helping the NAIC develop rules for calculating loss ratios and for compensating enrollees with rebates when the minimum MLR standards are violated.
One of the IRDs the subgroup discussed, IRD071, proposes that rebates should be paid only to enrollees who were present during the last experience year.
Another, IRD073, proposes that, in calculating the annual rebate, the ratio developed from the MLR benchmark excess over the results of the 3-year averaging should be applied to the plan year premium from the third year.
During the conference call, health insurer representative expressed concern regarding these proposals.
One insurance company representative asked how MLR calculations would reflect rebates paid in one of the prior years.
Gerald Lucht, a subgroup member from Illinois, said that, for the first-year rebate calculation, the calculation would be done for that year only and then calculations would move onto the next year.
