HHS unveiled sample notices that health plans must send policyholders beginning this summer to explain how their premiums are spent and informing them when rebates are owed because too little was spent on healthcare services.

The notifications—required by the Patient Protection and Affordable Care Act—will detail what percentages of premiums go toward various activities, such as underwriting. HHS is adding a requirement that the notification include whether the plan met federal standards on the minimum percentage that those plans must devote to delivering healthcare services or activities that qualify as “quality improvement.”

The law requires insurance companies in the individual and small-group markets to spend at least 80% of premium dollars—beginning in 2011—on medical care and quality improvement. Insurance companies in the large-group market must spend at least 85% on such activities. Plans must provide rebates beginning Aug. 1 if they do not meet those minimums. Separately, the total number of rejected state waivers from the medical-loss ratio standard rose to 10, and the number approved or partially approved rose to seven. HHS denied a waiver sought by Wisconsin and approved a narrower version of North Carolina's request.