The Department of Health and Human Services announced Monday it has issued long-awaited regulations on the medical loss ratio provision of the Affordable Care Act.

New rules require health insurers to spend 80 percent (for individual and small-group markets) to 85 percent (for large group contracts) of consumers' premiums on direct care for patients and efforts to improve care quality. If they do not meet this requirement, they have to issue rebates to policyholders, beginning in 2012.

The interim final regs issued by HHS were, for the most part, not changed from those recommended by the National Association of Insurance Commissioners in late October. The Department announced it has also incorporated recommendations from a letter sent from the NAIC to HHS Secretary Kathleen Sebelius on Oct. 13 [See related: "NAIC updates Sebelius on MLR issues"]

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