Health insurers to issue more than $1B in rebates to customers, employers

April 30, 2012 by Christian Schappel

If you sponsor a health plan, and you’re not self-insured, you could be getting a nice fat check from your insurance carrier this August.

Beginning in the 2011 calendar year, the healthcare reform law has required insurers spend at least 80 cents of each premium dollar they take in over the course of a year — 85 cents for plans in the large group market — on medical care and healthcare quality improvement.

If they spent less than that, they have to pay the amount back to policy holders — either by issuing them checks or by reducing future insurance premiums. 

As a result, insurers are expected to refund between $1.2 billion and $1.3 billion dollars in profits this August, according to two research groups.

This is the first time insurers have to issue rebates due to the healthcare reform law rule, most commonly referred to as the medical loss ratio requirement.  

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