Members may receive a Medical Loss Ratio rebate check mailed recently from their insurance carriers.[i] Your treatment of this rebate check may be more complex than apparent. Generally, you have 90 days to make your determination and payments, if appropriate.
Employers who are state or local governments or church plans are exempt from the Employee Retirement Income Security Act (ERISA), and the following information would not apply. These exempt employers should instead refer to HHS Guidance, 76 Fed. Reg. 76596 (Dec.7, 2011).
o How many plans the employer offerso The contribution split between employee and employer if sharedo Whether employee contributions were taken pre-tax or after tax, as rebate checks may be taxable compensation; other uses may trigger imputed incomeo If refund checks are issued, whether or not you consider terminated employeeso How to handle COBRA participantso Whether language in your insurance contracts or plan document directs the disposition of your rebate
[i] Rebates are from insurance carriers where the carrier spent less than the targeted 80% of each premium dollar paid on medical related claims (or 85% for large employers) during the 2011 year.