CMS-10418 - Crosswalk document

Crosswalk for Changes to the 2016 MLR Annual Reporting Form and Instructions
(CMS 10418) Following the 60 Day Comment Period
Table of Contents
A.

Introduction ...................................................................................................................... 1

B.

Changes to MLR and Risk Corridors Reporting Forms and Instructions ........................ 1

A. Introduction
CMS received seven comments and questions regarding the notice of the revised Medical Loss
Ratio (MLR) PRA package published in the Federal Register on May 2, 2017 (82 FR 20481).
The 60-day comment period closed on July 3, 201 7. The PRA package contains two collections
of information: the MLR Annual Reporting Form (including the Risk Corridors component) that
issuers must file with CMS each year and the accompanying Form Instructions, and the Rebate
Notices that issuers must send to subscribers and policyholders each year no later than
September 30. The PRA package modifies the 2015 MLR Annual Reporting Form, which was
previously approved by OMB under OMB Control Number 0938-1164. The Rebate Notices,
which were also previously approved under the same OMB Control Number, are not being
revised at this time.
B. Changes to MLR and Risk Corridors Reporting Forms and Instructions
The comments on the MLR Form and Instructions requested clarification of the instructions and
correction of errors and inconsistencies. No comments were submitted on the Risk Corridors
Plan-Level Data Form and Instructions. The following table contains the list of changes made
to the 2016 MLR Annual Reporting Form Instructions as a result of internal review and in
response to comments received during and following the 60-day public comment period.
2016 MLR Annual Reporting Form, Risk Corridors Plan-Level Data Form, and Form
Instruction Changes Following the 60-Day Comment Period
No.

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2

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Section
Edited

MLR
Reporting
Form

Part 3 – MLR
and Rebate
Calculation

MLR Form
Instructions

Summary of
Changes from
Prior Year

Revision
(Red indicates modified language)
Edited the description for Line 6.8: “6.8 Limited payable rebate
amount (the lesser of Lines 6.4 and sum of 6.7 see instructions)”

Rationale
To prevent user
confusion and errors.

Rearranged the order of items and made corrections and
clarifications to the following items:
Risk Corridors: Deleted lines on Part 3 related to transitional
adjustment percentage.. Renumbered the remaining Part 3,
To improve clarity and
readability.
Section 3 lines accordingly.
ICD-10 expenses: Deleted Part 1 Lines 4.6 and 5.8 and Part
6 Lines 3e and 4h. Renumbered the remaining Part 6 Section
3 line accordingly. Effective for the 2016 and later reporting

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Section
Edited

3

MLR Form
Instructions

General
Instructions

4

MLR Form
Instructions

Column
Definitions

5

MLR Form
Instructions

Part 2 –
Premium and
Claims

Revision
(Red indicates modified language)
years, ICD-10 expenses may no longer be included in quality
improvement activity expenses.
Rebate liability limit Limited payable rebate amount: […]
Revised the instructions for “Definition of Small Group and Large
Group” by adding the following bullet:
To provide flexibility and facilitate transition, in states that
changed the small employer upper limit between 2015 and
2016, issuers may either restate the prior year experience on
the 2016 MLR Form so that the data are reported on a
consistent basis (i.e. apply the 2016 definition to 2014 and
2015 data), or they may report 2014 and 2015 experience on
the 2016 MLR Form consistently with how that experience
was reported on the 2014 and 2015 MLR Forms.
Revised instructions for treatment of Basic Health Plans:
Columns 1–5
Individual Market
Include: Health insurance where the policy is issued to an
individual covering the individual and his or her
dependents in the individual market (including the Basic
Health Program).
Column 40
Government Program Plans (Not Subject to
Section 2718 of the PHSA)
Include: Government sponsored programs that are not subject to
section 2718 of the PHSA, such as Medicaid (Title XIX),
State Children’s Health Insurance Program (SCHIP)
(Title XXI), the Basic Health Program (established under
section 1331 of the PHSA), and other Federal or State
government-sponsored coverage (other than the Federal
Employees Health Benefits Program or State
government sponsored coverage for State employees or
retirees).
Revised instructions for Lines 1.9 and 1.10:
Line 1.9: [RC] 3/31 Column – Include:
-Expected payments from HHS for the 2016 benefit year, as
shown on the notification received from HHS by June 30,
2017 (unless instructed otherwise by HHS).
-Subtract from the above the difference between the
reinsurance payment amount reported by the issuer for the
2015 benefit year on the 2015 MLR Form (excluding any
adjustments for the 2014 benefit year) and the reinsurance
amount actually paid to the issuer for the 2015 benefit year.
Do not include adjustments for pending appeals unless the
appeal has been resolved (in which case the payment would
have been made).
-Add to the above any reinsurance amount that was paid to
the issuer for the 2014 benefit year and was not reflected on
the 2015 MLR Form.
Line 1.10: [RC] 3/31 Column – Include:
-Expected net payments from HHS (enter as a positive
amount) or charges payable to HHS (enter as a negative

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Rationale

In response to questions
requesting guidance and
clarification on the
reporting of prior year
experience in the
affected states.

To correct an error and
simplify reporting
requirement.

In response to comments
requesting clarification
on reporting the 2014
amounts to correctly flow
through Part 3 and risk
corridors calculation.

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Section
Edited

6

MLR Form
Instructions

Part 2 –
Premium and
Claims

7

MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

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MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

Revision
(Red indicates modified language)
amount) for the 2016 benefit year, as shown on the
notification received from HHS by June 30, 2017 (unless
instructed otherwise by HHS), including any risk adjustment
default charges or default charge allocation amounts.
-Subtract from the above the difference between the risk
adjustment amount reported by the issuer for the 2015 benefit
year on the 2015 MLR Form (excluding any adjustments for
the 2014 benefit year) and the amount actually paid to (use a
positive amount) or by (use a negative amount) the issuer for
the 2015 benefit year. Do not include adjustments for
pending appeals unless the appeal has been resolved (in
which case a payment would have been made).
-Add to the above any risk adjustment amount that was paid
to or by the issuer for the 2014 benefit year and was not
reflected on the 2015 MLR Form.
Edited instructions for Line 1.11: “If Tab 3, Line 10 6 of the Risk
Corridors Plan-Level Data Form is a charge, report that charge
amount on this line. If Tab 3, Line 6 is a payment, report $0 on
this line.”
Edited instructions for Line 1.3:
CY Column – Part 1, Lines 4.1 + 4.2 + 4.3 + 4.4 + 4.5 + 4.6,
Columns 3/31 + Deferred PY1 – Deferred CY
RC Column – Part 1, Lines 4.1 + 4.2 + 4.3 + 4.4 + 4.5 + 4.6,
Column [RC] 3/31”
Edited instructions for Line 1.4:
PY2 Column – Amount of cost-sharing reductions for 2014, as
reconciled in 2016, or if subsequently resubmitted, in 2017.
PY1 Column – Amount of cost-sharing reductions for 2015, as
reconciled in 2016, or if subsequently resubmitted, in 2017.
Revised instructions for Line 1.5:
PY2 Column – 2014 MLR Form, Part 2, Line 1.9, Columns 3/31 +
Deferred PY1 – Deferred CY. Restate amounts to reflect any
changes or updates to reinsurance payments for the 2014
benefit year communicated by HHS that occurred after June
30, 2015, including any changes communicated that occurred
after the filing of the 2014 MLR Form. If the issuer received a
higher reinsurance payment than was communicated by HHS,
include such higher amount.
PY1 Column – 2015 MLR Form, Part 2, Line 1.9, Columns 3/31 +
Deferred PY1 – Deferred CY. Restate amounts to reflect any
changes or updates to reinsurance payments for the 2015
benefit year communicated by HHS that occurred after June
30, 2016, including any changes communicated that occurred
after the filing of the 2015 MLR Form. If the issuer received a
higher reinsurance payment than was communicated by HHS,
include such higher amount.
CY Column – Part 2, Line 1.9, Columns 3/31 + Deferred PY1 –

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Rationale

To correct a
typographical error listing
a non-existent line.
To correct a
typographical error listing
a non-existent line.
In response to
comments, to clarify the
approach with regard to
2017 CSR reconciliation
results.

In response to questions
requesting clarification
on reporting payments in
excess of HHS
communications and
reporting the 2014
amounts to correctly flow
through Part 3 and risk
corridors calculation.

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Section
Edited

Revision
(Red indicates modified language)

Rationale

Deferred CY
RC Column – Part 2, Line 1.9, Column [RC] 3/31. The issuer can
adjust for differences in reinsurance payments for prior benefit
years that were actually received after June 30, 2016 that
differ from the amount reported on the 2015 MLR Form.
Therefore, issuers will report a total reinsurance payment
amount that reflects: the reinsurance payment amount for the
2016 benefit year (as reported to the issuer by CMS on the
June 30, 2017 report), minus the difference between the
reinsurance payment amount reported by the issuer for the
2015 benefit year on the 2015 MLR Form (excluding any
adjustments for the 2014 benefit year) and the reinsurance
amount that was actually paid to the issuer for the 2015
benefit year, plus any reinsurance amount that was paid to
the issuer for the 2014 benefit year and was not reflected on
the 2015 MLR Form. There are no adjustments for pending
appeals unless the appeal has been resolved (in which case
payment would have been made).
Revised instructions for Line 1.6, and added an example:
PY2 Column – 2014 MLR Form, Part 2, Line 1.10, Columns 3/31
+ Deferred PY1 – Deferred CY. Restate amounts to reflect
any changes or updates to transfer amounts for the 2014
benefit year communicated by HHS that occurred after June
30, 2015, including any changes communicated that occurred
after the filing of the 2014 MLR Form. If the issuer received a
higher transfer amount than was communicated by HHS,
include such higher amount.

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MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

PY1 Column – 2015 MLR Form, Part 2, Line 1.10, Columns 3/31
+ Deferred PY1 – Deferred CY. Restate amounts to reflect
any changes or updates to transfer amounts for the 2015
benefit year communicated by HHS that occurred after June
30, 2016, including any changes communicated that occurred
after the filing of the 2015 MLR Form. If the issuer received a
higher transfer amount than was communicated by HHS,
include such higher amount.
CY Column – Part 2, Line 1.9, Columns 3/31 + Deferred PY1 –
Deferred CY
RC Column – Part 2, Line 1.10, Column [RC] 3/31. The issuer
can adjust for differences in risk adjustment transfers for prior
benefit years that were actually paid or received after June
30, 2016, that differ from the amount reported on the 2015
MLR Form. Therefore, issuers will report a total risk
adjustment amount that reflects: the risk adjustment transfer
amount for the 2016 benefit year (as reported to the issuer by

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In response to questions
requesting clarification
on reporting payments in
excess of HHS
communications and
reporting the 2014
amounts to correctly flow
through Part 3 and risk
corridors calculation.

No.

Document

Section
Edited

Revision
(Red indicates modified language)

Rationale

CMS on the June 30, 2017 report), minus the difference
between the risk adjustment amount reported by the issuer for
the 2015 benefit year on the 2015 MLR Form (excluding any
adjustments for the 2014 benefit year) and the amount that
was actually paid to or by the issuer for the 2015 benefit year,
plus any risk adjustment amount that was paid to or by the
issuer for the 2014 benefit year and was not reflected on the
2015 MLR Form. There are no adjustments for pending
appeals unless the appeal has been resolved (in which case
payment would have been made).

11

12

MLR Form
Instructions

MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

Part 3 – MLR
and Rebate
Calculation

For example, suppose that the risk adjustment payment amounts
reported by CMS on June 30 of the respective years were $200
for the 2014 benefit year, $300 for the 2015 benefit year, and
$400 for the 2016 benefit year; and the issuer’s actual receipts
were $180 for the 2014 benefit year in Dec 2015, the remaining
$20 for the 2014 benefit year in Dec 2016, and $270 for the 2015
benefit year in Dec 2016. The amount reported on the 2014 MLR
Form was $200; and the amount reported on the 2015 MLR Form
was $280 (consisting of the $300 expected payment for the 2015
benefit year, and a –$20 adjustment for the 2014 benefit year).
On the 2016 MLR Form, the issuer would report $400 – ($300–
$270) + $20 = $390. Please note that any portion of payment
withheld for appeals would be treated as paid, unless and until
the issuer is informed otherwise.
Edited instructions for Line 1.8:
PY2 Column – Lines 1.2 + 1.3 – 1.4 – 1.5 – 1.6 – 1.7
Edited instructions for Line 6.6:
If Lines 6.6 and 6.8 were completed on the MLR Form for the
preceding year (for the 2016 MLR reporting year, use the
alternative instructions below):
PY2 Column – MLR Form for the preceding year, Part 3, Lines
6.6 + 6.8, Column PY1
PY1 Column – MLR Form for the preceding year, Part 3, Line 6.8,
Column CY
Issuers with experience in both the individual and small group
markets who merge markets in accordance with state law (such
as in Massachusetts, Vermont, and the District of Columbia),
should combine Line 6.8 amounts for both markets and include
the combined amount on Line 6.6 in the PY2 and PY1 Columns
for both markets on the current year’s MLR Form. Line 6.6 on the
preceding year’s MLR Form should already reflect a combined
amount.
An issuer who paid a higher state than federal MLR rebate under
a state MLR calculation that utilizes a single year of data rather
than a multi-year average MLR (such as New Jersey) may
substitute such higher state MLR rebate on Line 6.6.

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In response to a
comment, to correct a
typographical error.

In response to
comments, instructions
were revised to provide
flexibility, simplify the
calculation, correct the
errors in the formula,
improve clarity and
provide better numeric
examples.

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Document

Section
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Revision
(Red indicates modified language)
Alternative instructions:
If Line 6.8 was not completed on the MLR Form for the preceding
year (also applies for the 2016 MLR reporting year phase-in), prorate non-zero prior year rebate amounts as shown below. For
users’ convenience, CMS will provide on its website an Excel
spreadsheet automating this calculation. In lieu of pro-rating
using the formulas below, an issuer may choose to calculate the
paid rebate liability for each of the previous years’ MLR Forms
using the formulas for Lines 6.5-6.8. All references to Line 4.5
below mean Line 4.5 in Column Total.
Step 1: Using the 2015 MLR Form, Part 3:
-If two out of three years in the aggregation show the
preliminary MLR on Line 5.1 that either is blank or exceeds
the MLR standard on Line 6.1 in the same column, attribute
zero to the paid rebate liability for those two years, and
attribute the entire 2015 rebate to the remaining third year.
2014 paid rebate liability: Line 6.4, Column Total x [Lines 2.3
x (6.1 – 5.1 – 4.5), Column PY1] / [Lines 2.3 x (6.1 – 5.1 –
4.5), Column PY2 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column PY1
+ Lines 2.3 x (6.1 – 5.1 – 4.5), Column CY]
-2015 paid rebate liability: Line 6.4, Column Total x [Lines 2.3
x (6.1 – 5.1 – 4.5), Column CY] / [Lines 2.3 x (6.1 – 5.1 – 4.5),
Column PY2 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column PY1 +
Lines 2.3 x (6.1 – 5.1 – 4.5), Column CY]
-Note: If Line 2.3 is negative or blank for any column above,
use $0 as the value for Line 2.3 in that column. If the result of
Lines (6.1 – 5.1 – 4.5) is negative for any column, use 0% as
the value for Lines (6.1 – 5.1 – 4.5) in that column. If Line 5.1
was blank for any column because the business in that
column was non-credible, calculate the value for Line 5.1 by
dividing Line 1.8 or 1.9 by Line 2.3.
-Mini-Med Plans must use the following formulas:
-2014 paid rebate liability: Line 6.4, Column Total x [Lines
2.3 x (6.1 – 5.1 / 125% – 4.5), Column PY1] / [Lines 2.3 x
(6.1 – 5.1 / 150% – 4.5), Column PY2 + Lines 2.3 x (6.1 –
5.1 / 125% – 4.5), Column PY1 + Lines 2.3 x (6.1 – 5.1 –
4.5), Column CY]
-2015 paid rebate liability: Line 6.4, Column Total x [Lines
2.3 x (6.1 – 5.1 – 4.5), Column CY] / [Lines 2.3 x (6.1 – 5.1 /
150% – 4.5), Column PY2 + Lines 2.3 x (6.1 – 5.1 / 125% –
4.5), Column PY1 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column
CY]
-Student Health Plans must use the following formulas:
-2014 paid rebate liability: Line 6.4, Column Total x [Lines
2.3 x (6.1 – 5.1 – 4.5), Column PY1] / [Lines 2.3 x (6.1 – 5.1
/ 115% – 4.5), Column PY2 + Lines 2.3 x (6.1 – 5.1 – 4.5),
Column PY1 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column CY]
-2015 paid rebate liability: Line 6.4, Column Total x [Lines

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2.3 x (6.1 – 5.1 – 4.5), Column CY] / [Lines 2.3 x (6.1 – 5.1 /
115% – 4.5), Column PY2 + Lines 2.3 x (6.1 – 5.1 – 4.5),
Column PY1 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column CY]
For example, if on the 2015 MLR Form, Part 3, Individual market:
a) Line 6.1 shows an 80% MLR standard in all columns;
b) Line 5.1 shows blank in Column PY2, 70% in Column PY1,
and 90% in Column CY;
c) Line 6.4 shows $390 in Column Total;
then the entire $390 rebate payment would be attributed to 2014
and included on the 2016 MLR Form, Part 3, Line 6.6, Column
PY2; and $0 would be attributed to 2015 and included on the
2016 MLR Form, Part 3, Line 6.6, Column PY1.
-If one out of three years in the aggregation shows the
preliminary MLR on Line 5.1 that either is blank or exceeds
the MLR standard on Line 6.1 in the same column, attribute
zero to the paid rebate liability for that one year, and pro-rate
the 2015 rebate among the two below-standard years (Years
X and Y) as follows:
-Year X: Line 6.4, Column Total x Line 2.3, Column X x
(Line 6.1, Column Total – Line 5.1, Column X) / [Line 2.3,
Column X x (Line 6.1, Column Total – Line 5.1, Column
X) + Line 2.3, Column Y x (Line 6.1, Column Total – Line
5.1, Column Y)]
-Year Y: Line 6.4, Column Total x Line 2.3, Column Y x
(Line 6.1, Column Total – Line 5.1, Column Y) / [Line 2.3,
Column X x (Line 6.1, Column Total – Line 5.1, Column
X) + Line 2.3, Column Y x (Line 6.1, Column Total – Line
5.1, Column Y)]
For example, if on the 2015 MLR Form, Part 3, Individual market:
d) Line 6.1 shows an 80% MLR standard in all columns;
e) Line 2.3 shows $50,000 in Column PY2, $40,000 in
Column PY1, and $30,000 in Column CY;
f) Line 5.1 shows 90% in Column PY2, 70% in Column PY1,
and 60% in Column CY;
g) Line 6.4 shows $780 in Column Total;
then $0 rebate payment would be attributed to 2013 in Column
PY2 (due to 90% preliminary MLR); and the $780 rebate payment
would be pro-rated as follows:
-2014 paid rebate liability = $780 x $40,000 x (80% – 70%) /
[$40,000 x (80% – 70%) + $30,000 x (80% – 60%)] = $312;
-2015 paid rebate liability = $780 x $30,000 x (80% – 60%) /
[$40,000 x (80% – 70%) + $30,000 x (80% – 60%)] = $468.
In this example, $312 would be included on the 2016 MLR Form,
Part 3, Line 6.6, Column PY2; and $468 would be included on the
2016 MLR Form, Part 3, Line 6.6, Column PY1.
-If all three years in the aggregation show the preliminary
MLR on Line 5.1 below the corresponding MLR standard on
Line 6.1, pro-rate the 2015 rebate as follows:
-Column PY1: (Line 6.1, Column Total – Line 5.1,

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Column PY1) x Line 6.3, Column Total x (Line 2.3,
Column PY1 / Line 2.3, Column Total)
-Column CY: (Line 6.1, Column Total – Line 5.1, Column
CY) x Line 6.3, Column Total x (Line 2.3, Column CY /
Line 2.3, Column Total)
For example, if on the 2015 MLR Form, Part 3, Individual market:
ad) Line 6.1 shows an 80% MLR standard in all columns;
ba) Line 2.3 shows $530,000 in Column PY2, $490,000 in
Column PY1, and $3100,000 in Column CY, and $120,000 in
Column Total;
b) Line 4.5 shows 0% in Column Total;
c) Line 5.1 shows 7560% in Column PY2, 70% in Column
PY1, and 6083% in Column CY;
de) Line 6.4 shows $35,12000 in Column Total;
then the $35,12000 rebate payment would be pro-rated to 2014
and 2015 as follows:
-2014 paid rebate liability = $5,500 x $90,000 x (80% – 70% –
0%) x/ [$30,000 x ($40,000 / $120,000)(80% – 60% – 0%) +
$90,000 x (80% – 70% – 0%) + $100,000 x 0% (0% is used
because 80% – 83% is less than zero)] = $13,0300;
-2015 paid rebate liability = $5,500 x $100,000 x 0% (0% is
used because 80% – 83% is less than zero) / [(80% – 60% –
0%) x $30,000 x ($30,000 / $120,000) + $90,000 x (80% –
70% – 0%) + $100,000 x 0% (0% is used because 80% –
83% is less than zero)] = $1,500.
In this example, $13,0300 would be included on the 2016 MLR
Form, Part 3, Line 6.6, Column PY2; and $1,500 would be
included on the 2016 MLR Form, Part 3, Line 6.6, Column PY1.
Step 2: Using the 2014 MLR Form, Part 3:, apply the formulas in
Step 1 to determine the paid rebate liability for 2014 (CY column
of the 2014 MLR Form), and
-2014 paid rebate liability: Line 6.4, Column Total x [Lines 2.3
x (6.1 – 5.1 – 4.5), Column CY] / [Lines 2.3 x (6.1 – 5.1 – 4.5),
Column PY2 + Lines 2.3 x (6.1 – 5.1 – 4.5), Column PY1 +
Lines 2.3 x (6.1 – 5.1 – 4.5), Column CY]
-Note: If Line 2.3 is negative or blank for any column above,
use $0 as the value for Line 2.3 in that column. If the result of
Lines (6.1 – 5.1 – 4.5) is negative for any column, use 0% as
the value for Lines (6.1 – 5.1 – 4.5) in that column. If Line 5.1
was blank for any column because the business in that
column was non-credible, calculate the value for Line 5.1 by
dividing Line 1.8 or 1.9 by Line 2.3.
-Mini-Med Plans must use the following formula:
-2014 paid rebate liability: Line 6.4, Column Total x [Lines
2.3 x (6.1 – 5.1 / 125% – 4.5), Column CY] / [Lines 2.3 x
(6.1 – 5.1 / 175% – 4.5), Column PY2 + Lines 2.3 x (6.1 –
5.1 / 150% – 4.5), Column PY1 + Lines 2.3 x (6.1 – 5.1 /
125% – 4.5), Column CY]

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-Student Health Plans must use the following formula:
-2014 paid rebate liability: Line 6.4, Column Total x [Lines
2.3 x (6.1 – 5.1 – 4.5), Column CY] / [Lines 2.3 x (6.1 – 5.1 /
115% – 4.5), Column PY1 + Lines 2.3 x (6.1 – 5.1 – 4.5),
Column CY]
For example, if on the 2014 MLR Form, Part 3, Individual market:
a) Line 2.3 shows $5,000 in Column PY2, $30,000 in Column
PY1, and $90,000 in Column CY;
b) Line 4.5 shows 1.0% in Column Total;
c) Line 5.1 shows blank in Column PY2, 60% in Column PY1,
and 70% in Column CY;
d) Line 1.8 shows $2,000 in Column PY2;
e) Line 6.1 shows an 80% MLR standard in all columns;
f) Line 6.4 shows $11,340 in Column Total;
then the $11,340 rebate payment would be pro-rated as follows:
-2014 paid rebate liability = $11,340 x $90,000 x (80% – 70%
– 1%) / [$5,000 x (80% – $2,000/$5,000 – 1%)
($2,000/$5,000 is used because Line 5.1 is blank) + $30,000
x (80% – 60% – 1%) + $90,000 x (80% – 70% – 1%)] =
$5,832.
iInclude this amount the result on the 2016 MLR Form, Part 3,
Line 6.6, Column PY2 together with the 2014 amount obtained in
Step 1.

13

MLR Form
Instructions

Part 3 – MLR
and Rebate
Calculation

14

MLR Form
Instructions

Part 4 –
Rebate
Disbursement

Issuers with experience in both the individual and small group
markets who merge markets in accordance with state law (such
as in Massachusetts, Vermont, and the District of Columbia),
should combine the resulting prior year amounts for both markets
and enter the combined amounts on Line 6.6 in the PY2 and PY1
Columns for both markets.
Issuers subject to State MLR rebate requirements that resulted in
a higher rebate amount than the rebate amount in Line 6.4 of the
2014 and/or 2015 Federal MLR Form(s) may include such higher
rebate amount on this line in the PY2 and/or PY1 Columns,
respectively, in lieu of the allocated amount described above, to
the extent the higher State MLR rebate was paid to substantially
the same enrollees as those entitled to the Federal MLR rebate.
Edited instructions for Line 6.8 to add: “Issuers with experience in
both the individual and small group markets who merge markets
in accordance with state law (such as in Massachusetts, Vermont,
and the District of Columbia), should adjust the formulas above by
multiplying Line 6.7 by the ratio of Lines (2.1 – 2.2) / 2.3 in the
respective columns.”
Edited instructions for Line 4.g: “Amount of unclaimed rebates
from theall prior MLR reporting years”

Page 9 of 9

To correct an error to
ensure accurate
calculation in mergedmarket states.
In response to questions,
to clarify instructions