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The 85/15 you are referring to is called the Medical Loss Ratio. This applies to ACA coverage only (group or individual), and does not include carriers' Self Fu
by ecommerceguy 5y ago
The 85/15 you are referring to is called the Medical Loss Ratio. This applies to ACA coverage only (group or individual), and does not include carriers' Self Funded or Short Term products. When an insurer comes under the MLR (say, claims are 79% of premiums) the remainder upto 80% or 85% (depends on state) is paid back to the policyholders. For instance if you were on a UHC ACA plan in my geography last year, you would have received a portion of premium returned in the form of a check because UHC ran at 77%.
- bhupy 5y agoAs far as I know, Self Funded plans in non-Dental/Vision are fairly rare due to the massive stop loss required. Even the Fortune 500 employers use fully funded plans for healthcare.
- deleted 5y ago[deleted]
- ecommerceguy 5y ago>>Even the Fortune 500 employers use fully funded plans for healthcare. Care to cite that stat? From wiki: >>Historically self-funding has been most effective for large corporations and Fortune 500 companies with over 1,000 employees https://en.wikipedia.org/wiki/Self-funded_health_care https://en.wikipedia.org/wiki/Self-funded_health_care
- bhupy 5y agoYou’re right. I was under the (incorrect) impression that the stop loss on traditional health plans was prohibitively higher than on dental and vision, but it appears not to be the case. Most employers seem to be buying level-funded reinsurance plans just for the stop loss component, on top of the self-funded pool. Very cool, either way.