UPDATED: Medical Loss Ratio (MLR) Rebate Check Mailings to Begin

Transcription

1 Date: September 18, 2015 Market: Consumer Direct UPDATED: Medical Loss Ratio (MLR) Rebate Check Mailings to Begin Background Under the Affordable Care Act (ACA), all health insurers must spend a minimum percentage of the premiums they collect on health care services and quality improvement activities for their members This percentage is called the Medical Loss Ratio (MLR) and is calculated for an insurer s overall business based on the market segments in each state (not at the group level) Generally, insurers must spend at least 80 cents of every premium dollar they receive on health care services If the minimum MLR is not met within a market, insurers are required to pay a rebate to customers within that market segment These rebate checks must be received by September 30, 2015 Current Situation CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc (CareFirst) will distribute 20,230 MLR rebate checks to Consumer Direct Catastrophic MD subscribers on Monday, September 21, 2015 A sample of the mailings for CD SBU is included in this flash on pages 3-5 Rebate Information Rebates are calculated based on the premiums paid for medical products by legal entity (CFMI, GHMSI or BlueChoice) and jurisdiction (MD, DC, VA) Rebate-specific messages The Affordable Care Act requires insurers to pay out no less than 80 percent of every premium dollar in medical benefits Because health care spending in 2014 was slightly lower in your area than CareFirst had projected, the Medical Loss Ratio on your CareFirst Catastrophic Coverage plan fell slightly below this minimum The check you received is your rebate for the 2014 calendar year CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland, Inc and Group Hospitalization and Medical Services, Inc CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc are both independent licensees of the Blue Cross and Blue Shield Association Registered trademark of the Blue Cross and Blue Shield Association Registered trademark of CareFirst of Maryland, Inc

2 MLR Customer Service Numbers The following MLR telephone numbers are provided in the notices: Member Service: , Broker Service: Additional Information To view FAQs for MLR rebates, go to MLR Rebate Talking Points are included in this flash on pages 6-8 For more information on Medical Loss Ratio visit Should you have any questions, please contact your broker sales representative Vickie Cosby Vice President Consumer Direct Sales CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland, Inc and Group Hospitalization and Medical Services, Inc CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc are both independent licensees of the Blue Cross and Blue Shield Association Registered trademark of the Blue Cross and Blue Shield Association Registered trademark of CareFirst of Maryland, Inc

3 CareFirst BlueCross BlueShield Mill Run Circle Owings Mills, MD August 19, 2015 Member Member address Notice of Health Insurance Premium Rebate Re: Health Insurance Premium Rebate for Year 2014; Policy # Dear: This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums This rebate is required by the Affordable Care Act - the health reform law The Affordable Care Act requires CareFirst of Maryland, Inc DBA CareFirst BlueCross BlueShield (CareFirst) to issue a rebate to you if CareFirst does not spend at least 80 percent of the premiums it receives on health care services, such as doctors and hospital bills, and activities to improve health care quality, such as efforts to improve patient safety No more than 20 percent of premiums may be spent on administrative costs such as salaries, sales and advertising This requirement is referred to as the Medical Loss Ratio standard or the "80/20 rule The 80/20 rule in the Affordable Care Act is intended to ensure that consumers get value for their health care dollars You can learn more about the 80/20 rule and other provisions of the health reform law at: What the Medical Loss Ratio Rule Means to You The Medical Loss Ratio rule is calculated on a State by State basis In Maryland, CareFirst did not meet the Medical Loss Ratio standard In 2014, CareFirst spent only 752% of a total of $979,774 in premium dollars on health care and activities to improve health care quality Since it missed the 80 percent target by 48% of premiums it received, CareFirst must rebate 48% of your health insurance premiums We are required to provide this rebate to you by September 30, 2015, or apply this rebate to your premium that is due on or after September 30, 2015 We are enclosing a check MAN9100 (7/15) CareFirst BlueCross BlueShield is the business name of CareFirst of Maryland, Inc and is an independent licensee of the Blue Cross and Blue Shield Association Registered trademark of the Blue Cross and Blue Shield Association Registered trademark of CareFirst of Maryland, Inc

4 Need more information? If you have any questions about the Medical Loss Ratio and your health insurance coverage, please contact CareFirst toll-free at or wwwcarefirstcom/mlrfaqs Sincerely, Wanda Oneferu-Bey Executive Vice-President, Consumer Direct SBU CareFirst BlueCross BlueShield

5 CareFirst BlueCross BlueShield Mill Run Circle Owings Mills, MD August 19, 2015 Member Member Address The Affordable Care Act requires insurers to pay out no less than 80% of every premium dollar in medical benefits Because health care spending in 2014 was slightly lower in your area than CareFirst had projected, the Medical Loss Ratio on your CareFirst BlueCross BlueShield Catastrophic plan fell slightly below this minimum You are receiving a rebate which is enclosed The attached communication provides additional detail If you have further questions, you are encouraged to visit wwwcarefirstcom/mlrfaqs or call us at MAN9100 (7/15) CareFirst BlueCross BlueShield is the business name of CareFirst of Maryland, Inc and is an independent licensee of the Blue Cross and Blue Shield Association Registered trademark of the Blue Cross and Blue Shield Association Registered trademark of CareFirst of Maryland, Inc Check Number PAY TO THE ORDER OF: ID Number CareFirst BlueCross BlueShield is the business name of CareFirst of Maryland, Inc and is independent licensee of the Blue Cross and Blue Shield Association Registered trademark of the Blue Cross and Blue Shield Association Registered trademark of CareFirst of Maryland, Inc EXACTLY NINETEEN AND 90/100 DOLLARS Mill Run Circle Owings Mills, MD AMOUNT MO DAY YR 08/01/2015 $ ********* ** Not Valid Over $100 ** Not Valid After 6 Months / / : : /

6 2015 MLR Talking Points for Service and Sales Talking Points for the MLR Rebate for the 2014 Calendar Year - Consumer Direct Catastrophic Coverage and Large Group BlueChoice Virginia 1 Consumer Direct subscriber asking Why did I get a slightly smaller or higher rebate this year? Claims activity varies year-to-year which has an impact on the amount of rebate 2 Can I apply my rebate check to my premium? No 3 Rebates paid based on location of group (Will not be included in FAQs on website) Rebates are paid to groups based on the state in which the group is located For example, if a group has a BlueChoice small group product, moves to Virginia and does not make any changes to their benefits, they still have the BlueChoice product Therefore, they will receive a rebate because Virginia small group is eligible for a rebate 4 How should an Employer distribute the rebate to their employees? Employers or administrators of a group health plan, including plans offered by non-governmental employers subject to the Employee Retirement Income Security Act of 1974 (ERISA), may have fiduciary responsibilities regarding use of the MLR rebates Some or all of an MLR rebate may be an asset of the plan which must be used for the benefit of employees covered by the policy As a general summary, for group health plans that are employer plans governed by ERISA or that are state or local governmental plans, an employer must distribute the rebate in one of three ways: reduce employees portion of premium for the upcoming year for subscribers covered under any option offered by the health plan at the time the rebate is received; reduce employees portion of premium for the upcoming year for subscribers covered under the option offered by the health plan to which the rebate applies at the time the rebate is received; provide a cash rebate to employees or subscribers that were covered by the health insurance on which the rebate is based CareFirst, however, cannot provide legal advice regarding an employer s obligations, and individual groups should consult with their legal or benefits advisors in light of their specific circumstances Employers also may consult the Department of Labor s guidance for group health plans subject to ERISA in Technical Release , available at the guidance for State or local governmental plans at 45 CFR , or, for general information, the Department of Labor s Employee Benefits Security Administration at EBSA (3272) A group health plan that is (1) not a governmental plan and (2) not governed by ERISA, such as a church plan, should only receive a rebate if the plan provided CareFirst with written assurance that the plan would utilize any MLR rebates in the same manner as an ERISA plan or non-federal governmental plan If so, the plan should comply with that attestation If a church plan (or similar plan) did not provide such an attestation, CareFirst distributed any applicable rebate to the group s members in accordance with federal regulations 5 COBRA subscribers The COBRA premium is paid to CareFirst by the group, not directly by the subscribers We are not paying rebates to COBRA subscribers individually We did mail notices to the COBRA subscribers in the groups; however, the group should provide benefit of the rebate to COBRA subscribers in the same manner in which they provide benefits to their employees 1

7 2015 MLR Talking Points for Service and Sales 6 Lists of products by legal entity that will receive rebates Below are two tables showing which products received rebates Market segment 2014 State where Individual, Small Affiliate the group is located Group or Large Group Products included MD Individual CFMI Catastrophic VA Large BlueChoice These population sets are ELIGIBLE for 2014 rebates: Opt-Out, Opt-Out Plus, BC Advantage and HealthyBlue Legal Entity Jurisdiction Federal Market Segment Target Admin% Target MLR% CFMI MD Individual 20% 80% BLUECHOICE VA Large 15% 85% Therefore, these population sets are NOT ELIGIBLE for 2014 rebates: BLUECHOICE* DC Individual 20% 80% BLUECHOICE* DC Small Group 20% 80% BLUECHOICE* DC Large Group 15% 85% CAREFIRST NCA (GHMSI) DC Individual 20% 80% CAREFIRST NCA (GHMSI) DC Small Group 20% 80% CAREFIRST NCA (GHMSI) DC Large Group 15% 85% BLUECHOICE* MD Individual 20% 80% BLUECHOICE* MD Small Group 20% 80% BLUECHOICE* MD Large Group 15% 85% CAREFIRST NCA (GHMSI) MD Individual 20% 80% CAREFIRST NCA (GHMSI) MD Small Group 20% 80% CAREFIRST NCA (GHMSI) MD Large Group 15% 85% CAREFIRST OF MARYLAND INC MD Individual 20% 80% CAREFIRST OF MARYLAND INC MD Small Group 20% 80% CAREFIRST OF MARYLAND INC MD Large Group 15% 85% BLUECHOICE* VA Individual 20% 80% BLUECHOICE* VA Small Group 20% 80% CAREFIRST NCA (GHMSI) VA Individual 20% 80% CAREFIRST NCA (GHMSI) VA Small Group 20% 80% CAREFIRST NCA (GHMSI) VA Large Group 15% 85% *BLUECHOICE includes Opt-Out, Opt-Out Plus, BC Advantage and Healthy Blue 7 How are returned checks for terminated and out-of-business groups handled? Groups whose checks are returned will be researched to determine the reason for the return Terminated/out-of-business (group cannot be located) - We will redistribute the rebate to the subscribers, dividing it equally Check returned (group moved) - If the check is returned with a forwarding USPS address label, we will r the check to the forwarding address 2

8 2015 MLR Talking Points for Service and Sales 8 The group owner wants to return the check to CareFirst for reissue because of one of the following situations What is the process? (Will not be included in FAQs on website) The group no longer exists and the bank will not cash the check under the group name, so the owner wants the check reissued in a different name Answer: If the group has been purchased, the new group must submit a W-9 or new letterhead supporting the change in ownership to Accounting Services (OM 1-610) Once verified, Service should forward the request for reissue with name change to OM The owner wants CareFirst to disburse the rebates directly to the employees Answer: The group must disburse the rebates CareFirst cannot disburse rebates for the group 9 Subscribers over 65 Individual over 65 products were not included in the MLR calculations because there are different Federal reporting requirements for those products Subscribers with those products are not eligible for MLR rebates Subscribers over 65 who are covered under an employer group should benefit from any rebates paid to those employer groups, as noted above 10 Why are 2 signatures needed to endorse the rebate check? Two signatures are not required to endorse the check The recipient of the check is the only name needed to endorse the check The message on the top of the check The face of this check has a burgundy and blue background on white paper and requires two (2) signatures refers to the two signatures of the CareFirst executives printed on the bottom right of the check front 11 How will the group know which employees are included in the rebate? Rebate check(s) will be sent directly to the employer Under the law, the rebate(s) should be used for the benefit of the health plan s subscribers (eg, covered employees) Employers will receive a report indicating all employees eligible that were enrolled to receive a rebate based on plan enrollment in the group for the period covered by the rebate ### 3