IBC eBulletin - Minimum Medical Loss Ratio Provision

As a part of Independence Blue Cross's (IBC) implementation of the Minimum
Medical Loss Ratio (MLR) provision of the Affordable Care Act, commonly called
health care reform, we must identify each of our group customers as a small or
large group, as defined by the federal government, and verify the Employee
Retirement Income Security Act (ERISA) status of the group.

The clarified regulations on the MLR provision were recently released by The Department of
Health and Human Services last month, and IBC is now collecting this critical
information from customers. We will send a letter to groups the week of January
16, 2012, requesting this information and providing background on the MLR
provision of health care reform. Group customers should call
1-877-475-4224 to report their information to IBC no later than February 20,
2012. It is recommended that groups have their CID available for
identification purposes, which will be printed in their letter.

In an effort to assist with this reporting requirement, we will also proactively
contact groups by phone to obtain this information. Your groups may also ask you
to report their average number of employees and ERISA status on their
behalf.

Identifying average number of employees

Under health care reform, an employee is any person for whom a company issues
a W-2, regardless of part-time hours, seasonal status, or whether he or she has
medical coverage. Groups are required to tell us if the average number of
employees they had working for them for both the 2010 and 2011 calendar years
was 50 or fewer, or more than 50. While we have enrollment
information on file, we do not capture the the number of employees as defined by
the federal government.

Identifying groups as ERISA-covered or ERISA-exempt

We also need to know the ERISA status of each group. Generally, church
organizations and government plans are ERISA-exempt, while most other groups are
ERISA-covered groups. As you may know, ERISA is a federal law that governs the
benefits that employer groups provide to its members.

For more information on MLR provisions, calculations, and rebates, please read the Frequently Asked Questions. This document will be available on the Health Care Reform section of www.ibx.com in the next few days for groups to reference as
well.

Thank you for assisting your customers with this important provision of health care reform.

Group Letter

If you have any questions, please contact your Independence Blue Cross account executive.

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Independence Blue Cross. All rights reserved.

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PA 19103

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Blue Cross offers products directly, through its subsidiaries Keystone Health
Plan East and QCC Insurance Company, and with Highmark Blue Shield. Independent
licensees of the Blue Cross and Blue Shield Association.

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