Health insurance rebates may be held by employers

health insurance for small businesses

Workers health insurance refund checks

The refund checks may not be seen by workers if their employers reinvest them into coverage.

The Affordable Care Act has caused $1.1 billion in health insurance premiums to be refunded to policyholders, and though millions of individually insured individuals have received a check in the mail, workers are often finding that their employers are leading to a stall in the rebates process.

This is leaving many employees wondering where the money is going.

Workers did receive notification that they would be receiving a rebate, but that it would come to them through their employers, which “must follow certain rules in distributing the rebate to you.” Employers, as significant contributors to the premiums for the health insurance received by the workers, are now making the decision as to when, how, and if the rebate will be distributed among the employees or if it will instead be put to another purpose, such as upgrading the coverage or lowering the premiums, deductibles, etc.

According to Mercer health insurance benefits specialist, Mendy Stein, the phones have been ringing off the hook from human resource departments nationwide. He explained that “We’re seeing a very high increase in the number of calls that H.R. call centers are handling from employees saying, ‘Where’s my money?’”.

The law has given employers a maximum of three months within which they must make the decision – with which they have a significant amount of discretion – regarding how the rebate money will be spent or refunded. Provided that it is used to benefit the participants in the health insurance plan, then they have a great deal of wiggle room as to how it will be used.

Employers are using a number of different methods for spending the health insurance refunds.

Some have been giving the money directly back to the employees by adding it to their paychecks or by giving them increased pay during vacation days. Some are also looking into additional options, such as reducing the premiums for the next year, or adding wellness programs that reward those employees who take on efforts to live a healthier lifestyle, such as quitting smoking or losing weight.

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