IRS, HHS Provide Guidance for Insurers Related to Medical Loss Ratio

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HHS releases the “medical loss ratio” interim final rules that allow, in part, for the deduction of certain taxes from premium revenue before calculating the medical loss ratio. According to the regulations, insurance providers may deduct federal and state taxes that apply to health insurance coverage from premium revenue when calculating medical loss ratios, HHS says. IRS offers temporary relief to certain Blue Cross or Blue Shield organizations, and certain other organizations faced with implementing the medical loss ratio rule that could impact the special treatment they receive under tax code Section 833. This is scheduled to take effect for the first taxable year beginning after Dec. 31, 2009, under new tax code Section 833(c)(5).  

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