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80/20 Rule: Health Care Rebate Checks Distributed 8/1

Tuesday, July 24, 2012

Posted by Katie Vlietstra - Come August 1st, some members of the self-employed community will receive rebate checks from their health insurance companies if they failed to spend 80% of health care premiums on medical care. The 80/20 rule or Medical Loss Ratio rule was included in the Affordable Care Act as a mechanism to ensure transparency and accountability between the consumer and health insurance companies.  It is estimated that a family of four that purchases its own health insurance could receive a rebate up to $151.

Based on data from the U.S. Department of Health and Human Services, it is expected that in total, 12.8 million Americans will receive a rebate check directly (individual plan holders) or indirectly (group plan participants), employers will receive the rebate. For the individual market, the department estimates that 2.6 million households will receive a rebate check, returning nearly $394 million to consumers.  Those living in Mississippi, Alabama, Maryland, and Delaware, are on track to receive the highest rebates, ranging from $651-$461. 

Regardless of a rebate check or not, consumers will learn from their insurance companies if they met, exceeded, or fell below the 80/20 ratio. This will be invaluable information for the self-employed as they weigh their health insurance options for the coming year and decided if they need more or less coverage.

To learn more about the rebate or other provisions of the Affordable Care Act, please visit: www.healthcare.gov


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