Statement on the application of medical loss ratio standards to certain health plans under the Affordable Care Act

Jay Angoff, director of the Office of Consumer Information and Insurance Oversight, within the U.S. Department of Health and Human Services (HHS) released the following statement September 30, regarding the application of medical loss ratio standards to certain health plans under the Affordable Care Act:

"As many employers and insurers consider health insurance options for 2011, one question that has been raised is the applicability of provisions of the Affordable Care Act to health plans and coverage with special circumstances. HHS remains committed to implementing the law in a way that minimizes disruption to coverage that is available today while also ensuring that consumers receive the benefits the Act provides.

"For example, pursuant to the Affordable Care Act and our regulations, HHS recently announced an expedited process for plans to apply for a waiver from the requirement in the Affordable Care Act establishing minimum annual limits where such limits would result in decreased access or increased premiums. HHS has approved dozens of these waiver requests, most often filed by so-called "mini-med" plans, and in doing so, has ensured the continuation of health coverage for workers and their families. Complete waiver applications were generally processed in 48 hours.

"More recently, the issue of the applicability of the medical loss ratio requirements to plans such as mini-med plans has come up. HHS has not yet issued regulations implementing the medical loss ratio requirements because the Affordable Care Act tasks the National Association of Insurance Commissioners (NAIC) with first making recommendations to the Secretary.

"Although the NAIC is close to completing its work, we understand that some employers must soon make decisions regarding coverage options for 2011. As such, we fully intend to exercise her discretion under the new law to address the special circumstances of mini-med plans in the medical loss ratio calculations. According to the Affordable Care Act, medical loss ratio "methodologies shall be designed to take into account the special circumstance of smaller plans, different types of plans, and newer plans." We recognize that mini-med plans are often characterized by a relatively high expense structure relative to the lower premiums charged for these types of policies. We intend to address these and other special circumstances in forthcoming regulations."

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Oxendine: Sylvester Peanut Warehouse Fire was Accidental; Loss Estimated at $3.5 Million

Insurance and Safety Fire Commissioner John W. Oxendine announced earlier this week that the fire that gutted the Farm Commodities Peanut Warehouse in Sylvester, GA, last Tuesday was accidental.

Our investigation was able to rule out arson, electrical problems, and weather as causes of the fire," Oxendine said. "We believe acetylene cutting torches used in the warehouse the day before the fire may have sparked the blaze."

The fire, which continued to smolder for several days, caused an estimated $3.5 million loss, Oxendine said: $2 million on the structure and $1.5 million on contents.

More than 2300 tons of peanuts were burning," Oxendine said. "This is a serious economic loss for this community."

Several local fire departments pitched in to extinguish the blaze, which took most of last week, Oxendine added.

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