Last year, CFI Care (not its real initials) sent out a form letter to the effect that this wasn’t going to be an issue for them:
The Affordable Care Act requires health insurers in the individual and small group market to spend at least 80 percent of the premiums they receive on health care services and activities to improve health care quality (in the large group market, this amount is 85 percent). This is referred to at the Medical Loss Ratio (MLR) rule or the 80/20 rule. If a health insurer does not spend at least 80 percent of the premiums it receives on health care services and activities to improve health care quality, the insurer must rebate the difference.
This year? It’s an issue. Upon doing the actual calculations, they discovered that they had in fact forked out a hair under 78 percent, and therefore would have to issue rebate checks — or, alternatively, would have to credit the appropriate sum against this year’s premiums. I assume they did the latter, since I have received no such check and since there was relatively little wailing and/or gnashing of teeth in the front office this past January at renewal time.
Possible downside: should the carrier meet the 80-percent spec next time around, the expected premium increase might look even bigger than it really is.