What is the Medical Loss Ratio or “MLR”?
Federal law (the Affordable Care Act) and Massachusetts state law require that health insurance companies spend a minimum percentage of their policyholders’ premiums on medical expenses. Medical expenses are defined as not only the clinical care and services provided to plan members, but activities designed to improve health care quality as well.
This minimum percentage, or threshold, that health insurers must meet is called the Medical Loss Ratio (“MLR”). The MLR standard applies to health insurance plans offering group or individual coverage. It does not apply to self-insured plans.
When setting premium rates for each upcoming year, insurers must make calculated estimates based on the most current cost trends. Due to a number of factors, what’s projected often differs from what’s actually spent (as with setting household budgets).
If a health insurer spent less on medical expenses than what was projected (the amount upon which premiums for the year ahead are based), the MLR requirement ensures that affected consumers receive money back on the unused portion of their premium. Learn more about MLR.
What was the required MLR for 2023?
This grid shows the 2023 MLR thresholds by market and state.
* In Massachusetts, individuals and small groups are treated as merged market
To whom did Harvard Pilgrim issue 2023 rebates?
Harvard Pilgrim offers plans under different licenses in different markets and states. Harvard Pilgrim will be issuing 2023 MLR rebates in limited markets. This grid shows where and how MLR rebates apply for Harvard Pilgrim:
* In Massachusetts, individuals and small groups are treated as merged market
Note: The MLR rebate applies only to the premiums under the Harvard Pilgrim Health Care license and does not apply to premiums under the HPHC Insurance Company license.
How and when will employers and subscribers be notified?
Notices will be sent to groups who will receive a rebate. Notices will also be sent to subscribers belonging to those groups receiving a rebate. Federal MLR rebates and notification letters will be sent to employer groups and subscribers, postmarked on or before September 30, 2024, for New Hampshire HPHC Insurance Company small group.
Employer Notification Letter
- 2023 HPIC Employer Letter (Small Group)
Subscriber Notification Letter
- 2023 HPIC Subscriber Letter (Small Group)
How and when will the rebates be issued?
Rebates for New Hampshire HPHC Insurance Company small group customers will be issued a credit reflected on the October invoice. If a rebate recipient is no longer a customer, a rebate check will be sent to the address on file.
Are my taxes affected by this rebate?
Rebates may have a tax impact both to plans receiving rebates and to consumers. Please consult with your financial and tax advisors regarding the tax impact of the rebate or contact the IRS at 800-829-1040.