Filing Instructions For The 2015 Mlr Reporting Year - Centers For Medicare & Medicaid Services (Cms) Page 42

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In states with different MLR standards for the current reporting year or either of the two prior
years, issuers may scale the experience included in the Total column for Line 1.8 to account
for the change(s) in MLR standards. The scaling adjustment for the prior year is the current
year standard minus the prior year standard, multiplied by the prior year adjusted premium.
The scaling adjustment for two years prior is the current year standard minus the standard from
two years prior, multiplied by the adjusted premium from two years prior. For example, an
issuer subject to a 67% MLR standard in 2011, a 75% standard in 2012, and an 80% MLR
standard in 2013, with adjusted premiums of $1,000,000, $1,200,000, and $1,300,000 in 2011,
2012, and 2013, respectively, would have an adjustment of (80% - 75%) * $1,200,000 and
(80% - 67%) * $1,000,000 = $60,000 + $130,000 = $190,000 in 2013. Note that the scaling
adjustment amount(s) should be added to the Total Column for Line 1.8, and not in the CY,
PY1, or PY2 columns.
For 2014, in States that adopted the transitional policy outlined in the CMS letter dated
November 14, 2013, if the issuer provided transitional coverage in the individual and/or small
group market(s), the issuer may multiply the sum of the amounts reported in the PY1 Column
Lines 1.2 + 1.3 by 1.0001 before including it in the calculation for Line 1.8, Total Column, in
the relevant State and market.
For 2014 only, in states where the issuer participated in the State and Federal Exchanges
(sometimes referred to as “Marketplaces”) in the individual and/or small group market(s), the
issuer may multiply the sum of the amounts reported in the PY1 Column Lines 1.2 + 1.3 by
1.0004 before including it in the calculation for Line 1.8, Total Column, in the relevant State
and market.
Issuers with health insurance coverage in both the individual and small group markets, who
merge their markets in accordance with state law (such as in Massachusetts, Vermont, and the
District of Columbia), should combine Lines 1.2 + 1.3 – 1.4 – 1.5 – 1.6 – 1.7 for both markets
and enter the combined amounts on Line 1.8 in the PY2, PY1, CY, and Total Columns for both
markets (Columns 1-8). Please note that MLR numerator, denominator, and life-years to
determine credibility, and RC calculated fields are the only fields on the MLR Form where
experience for the two markets can be combined.
Line 1.9 – Mini-Med and Student Health Plan numerator after adjustment factor
PY2 Column –
Mini-Med: 1.5 x (Lines 1.2 + 1.3)
Student Health: 1.15 x (Lines 1.2 + 1.3)
(Note: Use these amounts to determine whether the base credibility factor in Line 4.2 is
allowed. Do NOT use this amount to calculate the 2015 MLR numerator in Line
1.9, Total Column.)
PY1 Column –
Mini-Med: 1.25 x (Lines 1.2 + 1.3)
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