Companies Receiving Health Insurance Rebates Must Share With Employees

A newly effective provision of the Affordable Care Act will require many employers to share group health insurance premium rebates with employees who contributed to the plans.

The provision requires insurance carriers to provide a rebate when the amount of claims paid out falls below a given percentage of the premiums they’ve received in a calendar year.

Employers who pay for all their employees’ coverage can pocket the rebate. But if their employees pay for their own coverage in part or in full, the law says they’re entitled to compensation. Barbara Hale is a principal with tax consulting firm UHY Advisors.

“They have 90 days within which to make refunds or decide that they want to otherwise use the rebate amounts to provide a premium holiday or to provide other enhanced benefits.”

The law required insurance carriers to cut rebate checks for 2011 on August 1. That means employers will have until the start of November to determine how to share the windfall.



Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...