Commercial Health Plans Failing To Meet Medical Loss Ratio Targets Will Refund $330 Million, 34% Lower Than 2012 Refunds

On July 24, 2014, the federal Department of Health and Human Services (HHS) announced that commercial individual and small group health plans would refund consumers $330 million in premium overpayments, about 34% less than the 2012 refund of $504 million. Under the Patient Protection and Affordable Care Act of 2010 (PPACA), health plans must spend at least 80% of premiums on direct patient services and quality improvement activities; the percentage is called the medical loss ratio (MLR). Health plans that spend less must refund the difference between what they spent and 80% back to the individual or small group plan . . .