DEFINITION OF "SMALL EMPLOYER" AND "LARGE EMPLOYER" FOR PURPOSES OF MEDICAL LOSS RATIO (MLR) REPORTING AND REBATE REQUIREMENTS UNDER 45 C.F.R. PART 158

Home Bulletins 2011 Bulletins cc29.html July 5, 2011 To:   ALL INSURANCE COMPANIES LICENSED TO WRITE HEALTH COVERAGE IN THE STATE OF TEXAS AND ALL HEALTH MAINTENANCE ORGANIZATIONS (HMOs) Re:   DEFINITION OF "SMALL EMPLOYER" AND "LARGE EMPLOYER" FOR PURPOSES OF MEDICAL LOSS RATIO (MLR) REPORTING AND REBATE REQUIREMENTS UNDER 45 C.F.R. PART 158 Under the interim federal regulations adopted by the US Department of Health and Human Services (HHS) to address MLR reporting and rebate requirements, 45 C.F.R. Part 158, HHS has adopted a definition of "small employer" as "having an average of at least 1 but not more than 100 employees on business days during the preceding calendar year" and a definition of "large employer" as "having an average of at least 101 employees on business days during the preceding calendar year." The definitions for "small employer" and "large employer" adopted by HHS include exceptions to the definitions, stating that until 2016 a State may substitute "50 employees" for "100 employees" in the definition of "small employer" and "51 employees" for "101 employees" in the definition of "large employer." The Department considered the definitions included in 45 C.F.R. Part 158, as well as state law, and has determined that for the purposes of federal MLR reporting and rebate requirements the exceptions relating to substitution of "50 employees" for "100 employees" and "51 employees" for "101 employees" do not apply. Therefore, for MLR purposes, the Department will apply the HHS definition for "small employer" as identified in the first paragraph of this bulletin. Mike Geeslin Commissioner of Insurance For more information, contact: ChiefClerk@tdi.texas.gov Last updated: 7/15/2025