- CMS is relaxing the data reporting deadlines for health plans regarding their need to refund premiums paid last year under the Affordable Care Act's medical loss ratio mandates. Health plans now have until Aug. 17 to file MLR data with the agency, rather than July 31.
- The agency said Friday that it was moving the reporting deadline back to allow health insurers to prepay premiums more quickly to help policyholders suffering financial duress as a result of the COVID-19 pandemic.
- However, there was no accompanying order from the agency moving up the Sept. 30 deadline for payments to enrollees. CMS also cited COVID-19 as its reason for not holding a public hearing on the rule relaxation.
Insurers are expected to refund a record $2.7 billion in premiums to enrollees under the MLR mandate, nearly double the amount paid last year, according to the Kaiser Family Foundation. Nearly 8,000 people are forecast to get a rebate, according to KFF, with an average payout of $340.
CMS has been easing rules in the wake of the COVID-19 pandemic, for example waiving regulations regarding telemedicine to ensure patients could still see providers for the duration of state shelter-in-place orders.
Now CMS is giving insurers another 18 days to report their data on 2019 MLR trends, noting that it had previously extended submission of 2019 risk adjustment data to mid-May, pushing publication of that report to July 17. While CMS said granting flexibility would help insurers to pay rebates more quickly to enrollees, there was no provision in its order mandating that those payments be sped up.
For small group and individual health insurance plans regulated by the ACA, insurers must spend at least 80 cents on every premium dollar on medical care. That rises to 85% for large group health plans. If they spend less than those mandates, the money must be refunded to its enrollees.
Along with the relaxed deadline, CMS mandated that if insurers underpay their MLR refunds before finalizing all calculations, they are obligated to make them up to enrollees, even if the differences are less than a few dollars. If they overpay, they can apply the difference to their MLR payments next year.
The only other year in which such rebates topped $1 billion was in 2012, as the ACA was just being enacted and insurers were often overcharging to compensate for market uncertainty.
The repeal of the individual mandate and the Trump administration's halting of risk corridor payments are both attributed to creating market uncertainties that drove up premiums in recent years.