A National Healthcare Update: Two Major Provisions

The Michigan Business and Professional Association (MBPA), along with its sister group, the Michigan Food and Beverage Association (MFBA), want to keep you up to date on the federal healthcare law and how it will affect you and your business.

Two major provisions of the Affordable Care Act took effect on August 1st, 2012. Medical Loss Ratio: It is the deadline for insurers to refund consumers and employers if they didn’t spend at least 80 percent of premiums on healthcare. Women’s Preventative Health Services: It requires most employers to include contraceptive and other women’s health services without copays in the insurance plans they offer to workers.

Medical Loss Ratio, MLR, has been discussed as a safeguard to keeping down the price of premiums. If insurance companies spend more than 15-20 percent of the premiums they collect on administrative costs, they must send a rebate back to policy holders. The first round of rebate checks has been sent out to consumers or their employers, about 1 billion dollars in total.  The employer then decides how to distribute rebate back to employees.

Women’s Preventative Services, eight in total, will be available to most new and renewing health insurance plans. Services available to women at no out-of-pocket cost: annual OB-GYN exams, birth control, breast-feeding counseling, and screenings for sexually transmitted diseases and HIV. Some religious groups and organizations are not required to participate by the August 1st deadline and are granted a one year exemption. Although there are no up-front costs for these services, the consumer does pay for the coverage in premium prices.