Insurers must also report when they do meet MLR target, rule says

Health insurance companies that meet or exceed the medical-loss-ratio standard established in the healthcare reform law must notify policyholders on or after July 1, according to a new rule from the CMS (PDF).

The MLR standard is a consumer protection in the Patient Protection and Affordable Care Act that requires individual and small-group plans to spend at least 80 cents of every premium dollar on medical care. Insurance companies that do not meet the standard for coverage provided in 2011 are obligated to send rebates to employers and individuals by no later than this year.

Under the new rule released Friday, HHS will also require companies to inform policyholders when they do do meet—or exceed—the standard. The notice may be sent in the same mailing with other notices—and may be provided electronically—but it must be displayed in 14-point, bold type on the front of the plan document, insurance policy or certificate, or in a separate notice, the regulation noted.

“If your insurance company is providing fair value for your premium dollars, you should know that too,” HHS Secretary Kathleen Sebelius said in a blog posting. “You'll be able to see your plan's medical loss ratio on HealthCare.gov starting this summer.”