On December 7, 2011, the Centers for Medicare & Medicaid Services (CMS) published a final rule (revising its December 1, 2010 interim final rule) implementing ACA medical loss ratio (MLR) requirements for health insurance issuers. Under the ACA, beginning in 2011, insurance companies in the individual and small group markets must spend at least 80% of insurance premiums collected on medical care and quality improvement activities (the threshold is 85% for insurers in the large group market). Insurers that do not meet the MLR standard must provide rebates to their customers beginning in 2012. The December 7, 2011 rule addresses how insurance companies calculate and report their MLR, and how rebates will be distributed, effective January 3, 2012. Among other things, the rule: provides that MLR rebates will be issued in a way that is tax-free to consumers; expands the MLR information that insurers must provide to consumers; allows certain ICD-10 transition costs to be counted as quality improvement activity; revises MLR rules for “mini-med” plans and expatriate policies; and modifies rules on deducting community benefit expenditures. CMS will accept comments regarding the treatment of ICD–10 conversion costs and certain rebate provisions until January 6, 2012. CMS has posted a fact sheet regarding the rule. Also on December 7, CMS published a separate interim final rule with comment period revising the MLR requirements related to the distribution of rebates by issuers in group markets for non-federal governmental plans.