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You are here News Health New health-care rules to take effect

New health-care rules to take effect

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New health care rules for 2011The new year will bring important changes to U.S. health-insurance rules, as new provisions related to last year's massive health-care overhaul take effect. The new year will bring important changes to U.S. health-insurance rules, as new provisions related to last year's massive health-care overhaul take effect.

*A provision that limits what health insurers can do with the money their customers send in as premiums. The rule requires that insurers spend at least 80 percent of this money on the customers themselves.

The companies must either spend this money to pay insurance claims or use it for activities that improve customers' health. For policies that are sold to large groups instead of small companies and individuals, the number is even higher: 85 percent. The remaining 15 or 20 percent of the money can be used for a company's salaries, marketing and overhead - or kept as profit.

Previously, there was no federal restrictions on insurance companies' spending. The federal government says some insurers kept 30 or even 50 percent.

Insurance companies say this could cause them to cut back on the services they offer, or even pull out of states where administrative costs are higher.

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