Maybe. Recently, several clients have received large premium rebate checks from their group health insurance company and have asked for guidance on the proper use of these funds. First, as previously mentioned in this forum, the Patient Protection and Affordable Care Act ("PPACA") added Section 2718 to the Public Health Services Act ("PHSA"). This section requires health insurance companies to meet specific medical loss ratios (80% for employers with less than 100 employees and 85% for employers with more than 100 lives). If an insurance company does not meet the stated loss ratios, it is required to rebate part of the premium received.
As a result of this continuing healthcare reform mandate, we have summarized the basic analysis necessary to determine if an employer can keep the premium rebate in whole or in part:
Should you have any questions, please call your relationship attorney.