Home / Insights / IBR Features Article On Health Insurance Rebates: What Should Employers Do With The Money?

Insight IBR Features Article On Health Insurance Rebates: What Should Employers Do With The Money?

Many Idaho employers recently received a refund check from their group health insurance policy. The Affordable Care Act (commonly known as Obamacare) requires health insurers to spend a stated amount of the premium they collect on paying medical claims or on activities that improve health care quality.

For small employer groups, insurers must spend 80 percent of the premium they collect on claims or quality improvement. For larger employer groups, insurers must spend 85 percent of the premium they collect on claims or quality improvements. Insurers who fail to meet these thresholds, which are called “medical loss ratios” or “MLRs,” must rebate a portion of the premium to policyholders.

Employers who receive these rebates are responsible for determining what to do with the money. In most cases, the employer cannot simply keep the money. Employer group health plans are governed by the federal Employee Retirement Income Security Act (ERISA), which imposes fiduciary duties on plan sponsors—in this case, employers—when handling plan assets.

If you would like more information about this topic or other legal issues, please contact a member of our Health Law Group or call 208.344.6000.

Click HERE to read the article on the Idaho Business Review website!

Related Insights

When a Personal Privilege... Isn't (Liquor License Security Interests and Liens in Idaho)

Recent legislation has substantially changed the landscape of the use, purchase, sale and leasing of liquor licenses since 2023. One area not (yet) touched in…

Read

Denial of the Debtor's Access to the Online Payment Portal Transports the Creditor to an Automatic Stay Violation

The automatic stay is the powerful, self-executing stop sign for all creditors upon their debtor’s bankruptcy filing. Actions in violation of the automatic stay are…

Read

Current Status of the Idaho Charitable Assets Protection Act

This article gives a brief summary of the Idaho Charitable Assets Protection Act (ICAPA) and provides an update on its impact.

Read

IRS Form 5500 Reminders for Employer Plan Sponsors

The July 31, 2024 un-extended Form 5500 due date for calendar year employee benefit plans is fast approaching. Careful review of the Form 5500 with…

Read