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Free Money? Not So Fast: New Rules For MLR Rebates

Back in August of 2012, I penned a blog post titled, When the Rubber Meets the Road: 4 Necessary Steps for Employers Receiving MLR Rebates. Well, it’s been a while, so I’d like to take a few moments to recap.

Remember that MLR law? The PPACA had a section that mandated that insurers must provide rebates to fully insured policyholders if their MLR (defined as the percentage of premium revenue spent on claims and medical care), is less than 85% (large groups) or 80% (small groups or individuals). Awesome! But here is the tricky part to remember--if you are one of the employers receiving a check, and your plan is subject to ERISA, you are now responsible for the allocation and distribution of those funds. For examples on how to do that, see my prior post here.

Here in Connecticut, only Oxford Health Plans will be paying small group rebates for 2013. But watch out if you have employees that live out of state!  Their states may be eligible for rebates with the other carriers--so be prepared and on the lookout if this is the case.

Questions? Don't hesitate to contact your OneDigital Consultant or Advisor for guidance on this new update.