IL SB1618

Health insurance issuers offering group or individual coverage must provide annual rebates to enrollees starting January 1, 2011, if the medical loss ratio falls below specified thresholds on a pro rata basis.

Large group market issuers must rebate when medical loss ratio is less than 85% (or higher percentage set by the Department); small group and individual market issuers must rebate when less than 80% (or higher percentage set by the Department).

Rebate amount equals the product of the percentage by which the medical loss ratio exceeds the applicable threshold multiplied by total premium revenue for the plan year.

Medical loss ratio calculations must follow the NAIC Patient Protection and Affordable Care Act Medical Loss Ratio Regulation as certified by the U.S. Department of Health and Human Services.

Beginning January 1, 2014, determinations shall be based on averages of premiums and revenue for the previous 3 years; the Department Director may request adjustments to the 80% standard if compliance would destabilize the individual market.