The Centers for Medicare and Medicaid Services (CMS) at the Department of Health and Human Services (HHS) issued 17 questions and answers addressing medical loss ratio (MLR) requirements for health insurers. This new guidance clarifies provisions in the December 2010 final regulations implementing the requirement under the Patient Protection and Affordable Care Act (PPACA) that insurers provide rebates to enrollees if less than 85% of premium dollars (80% in the small group and individual markets) are spent on clinical services and health care quality improvement. The questions and answers clarify that insurers should report experience of mini-med and expatriate plans separately from other plans. The guidance also addresses issues relating to reimbursement of clinical services and treatment of a third-party vendor's activities that improve health care quality.

The MLR requirements first apply to 2011 plan data, and annual reports are due June 1, 2012. Although these requirements only apply to insurers (not employers), it is expected that any cost associated with complying with these provisions will be passed on to employer plans. The guidance is available on the CMS website at: