2016 Medical Loss Ratio Rebates: Get a Check From Your Carrier?

Notifications from insurance carriers about this year’s rebates have recently started going out to employers. Under the ACA, carriers have until September 30 to notify employers if they are to receive a rebate.  Any impacted employees will also be notified by the carriers that a rebate is being issued to their employer and that the employee can check with their employer to find out if they qualify for a portion of it.

This is the fourth year of the medical loss ratio rebate checks. While the total number and the aggregate dollar amounts of rebates are about half of what they were in the MLR provision’s first year (2013), more are being issued this year than last year.  From what we hear, a relatively small percentage of employers are receiving rebates and for those that do the amounts are modest.

As a refresher….

The Minimum Medical Loss Ratio (MLR) requirement is part of the Affordable Care Act (ACA). The MLR requirements set minimum percentages of premium dollars that health plans must spend on health care (medical costs and activities that improve health care quality).  If a health plan spends less in medical costs than the minimum percentage it has to pay rebates to employers.  The employer then has to follow government guidelines on how to use the rebates. The employer must use the amount of an MLR rebate that is proportionate to the premiums paid by subscribers (enrolled employees) to benefit its subscribers. There are several ways employers can choose to do this.

For more information you can read our earlier article, refer to 68557 How Employers Should Handle MLR Rebates 8-30-16, or go to

https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/technical-releases/11-04

https://www.irs.gov/uac/medical-loss-ratio-mlr-faqs

Example Rebate Check



Facebook Iconfacebook like buttonTwitter Icontwitter follow buttonVisit Our LinkedIN Profile