NJ| New Jersey DOBI Bulletin No. 26-06 provides guidance to all health insurers, health/hospital/medical service corporations, and HMOs authorized to issue health benefits plans in New Jersey on implementing P.L. 2024, c. 62, which changes how medical loss ratio (MLR) is calculated under the Individual Health Coverage and Small Employer Health Benefits Programs. Beginning with reporting year 2026 and until regulations are updated, carriers must use the template accompanying the bulletin instead of Exhibit J (N.J.A.C. 11:20-7 Appendix) and Exhibit GG (N.J.A.C. 11:21-7A Appendix), with filings due August 1 each year per N.J.S.A. 17B:27A-9e.(2). All other existing filing requirements remain in effect, including combined and individual reports for affiliated carriers in the individual market and individual reports per carrier in the small group market.
Key Points:
- Premium calculation and refund transition rules — Premiums are total premiums for each of the three prior years, less ACA taxes/fees and risk adjustment payments made, plus risk adjustment payments received. Carriers may not restate prior years’ loss ratios for rebates/refunds, except that reporting year 2026 may include NJ-required refunds for 2024 and 2023 claims, and reporting year 2027 may include them for 2024 claims only.
- Three-year rolling average with runout — MLR must be calculated on incurred claims averaged across the prior calendar year and the two years preceding it, with the most recent prior year including a three-month claims runout through March 31 of the reporting year.
- IBNR factor and claim adjustments — A 3.3% IBNR factor applies only to Prior Year 1 claims (including runout); it does not apply to Prior Years 2 or 3. Pharmacy rebates and concessions are subtracted from incurred claims.