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Small Business Benefit Plans May Receive Rebate

Coming soon, small employer group's providing #healthcare medical coverage to their employees may be receiving a rebate check from their carrier mailed by September 30, 2019 for the 2018 plan year.

What is Medical Loss Ratio (MLR)?

A basic financial measurement used in the Affordable Care Act to encourage health plans to provide value to enrollees. If an insurer uses 80 cents out of every premium dollar to pay its customers' medical claims and activities that improve the quality of care, the company has a medical loss ratio of 80%. A medical loss ratio of 80% indicates that the insurer is using the remaining 20 cents of each premium dollar to pay overhead expenses, such as marketing, profits, salaries, administrative costs, and agent commissions. The Affordable Care Act sets minimum medical loss ratios for different markets, as do some state laws.

Will I get a rebate check from my insurance company?

If your insurance company doesn’t meet its 80/20 targets for the year, you’ll get back some of the premium that you paid.

You may see the rebate in a number of ways:

  • A rebate check in the mail

  • A lump-sum deposit into the same account that was used to pay the premium, if you paid by credit card or debit card

  • A direct reduction in your future premium

Your employer may also use one of the above rebate methods, or apply the rebate in a way that benefits employees.

If you or your employer will get a rebate, your insurance company must notify you by August 1.

Have Blue Care Network - HMO in 2018 as a small employer group? Expect a rebate check to be received soon. BCN will be refunding 0.4% of their 2018 premiums paid. Keep in mind that BCN will apply the de minimus rule and WON'T issue a check to groups with a rebate less than $20.

Have HAP - HMO in 2018 as a small employer group? HAP and Alliance missed the 80% target by 4.2% and 1.8% respectively. Expect a rebate check to be mailed by September 30, 2019.

Want to learn more? Contact AJM Associates at (248) 778-6070 or via email at

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