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OPM Publishes FAQ on FEHBP Medical Loss Ratio

Aug.30.2012

The U.S. Office of Personnel Management (OPM) published a letter and FAQ for federal employees regarding the ACA-mandated Medical Loss Ratio (MLR) for Federal Employees Health Benefits Program (FEHBP) plans in an August 22, 2012 Benefits Administration Letter. The FAQ explains the basic framework of the MLR standard and clarifies that:

  • whether an FEHBP plan owes a rebate is determined based on all of a carrier’s line of business (e.g., large group) within a given state;
  • any rebated owed by an FEHBP plan shall be paid directly to OPM, the policyholder for all FEHBP plans, as required by FAR §31.201;
  • any rebate paid by an FEHBP plan shall be deposited into the contingency reserve of that health plan and shall be used to directly reduce the cost of the next year’s premiums for that plan; and
  • FEHBP enrollees will receive a notice from their plan indicating whether the plan did or did not meet the MLR standard.
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For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

A. Xavier Baker
Partner – Washington, D.C.
Phone: +1 202.624.2842
Email: xbaker@crowell.com