Two Blue Shield of California policyholders have filed a class-action lawsuit against their insurer, alleging the company owes consumers millions of dollars in rebates after misreporting its medical loss ratio in 2014.
Becky Ebenkamp and Rebecca Morris filed the lawsuit July 1 on behalf of 446,407 individuals who purchased Blue Shield coverage in 2014. The lawsuit concerns how Blue Shield calculated its MLR in 2014.
Under the Affordable Care Act, insurers selling individual health plans are required to have a medical loss ratio of 80 percent, meaning they must spend at least 80 cents out of every premium dollar on customers' medical care. If an insurer's ratio falls below 80 percent, it is required to issue a premium rebate to customers.
Blue Shield of California's MLR fell below 80 percent in 2014, and the insurer was required to refund customers more than $64 million, according to the Los Angeles Times. Ms. Ebenkamp and Ms. Morris' complaint alleges Blue Shield owes consumers additional rebates because its 2014 MLR was lower than it reported at the time.
A former Blue Shield executive has leveled similar accusations against the insurer. Michael Johnson, who resigned as Blue Shield's policy director in 2014, filed a complaint against the insurer in June over its 2014 MLR report.
In an emailed statement, Blue Shield of California said, "Blue Shield of California received a lawsuit filed against the company in superior court in Los Angeles regarding medical loss ratio payments. We believe that the allegations are misinformed and incorrect, and that we are in compliance with all the rules regarding medical loss ratios."