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1StrongBlackMan

(31,849 posts)
Tue Jul 31, 2012, 02:04 PM Jul 2012

Question:

I just read an article saying that the ObamaCare rebate checks must be mailed out by August 1st.

The article indicated that most of the rebates will go to the employer in the form of premium reductions.

Since this is a retroactive requirement, i.e., looks at what the insurance company did list year), what happens to those that know longer work for the company that they held the insurance? Future premium reductions don't help if the employee isn't there (and insured) to get it.

Anyone know where to go to get an answer?

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Ruby the Liberal

(26,217 posts)
1. I have been researching this as well.
Tue Jul 31, 2012, 02:11 PM
Jul 2012

One of the stipulations is that the rebate money must have a direct tie to medical care (why it is being rebated in the first place), so may be determined by the former employer to issue 125 debit cards (those prepaid medical expense cards) or an FSA/HSA.

Another option is for employers to use their rebate to offset premium costs for the upcoming year.

While the latter doesn't address former employees, another consideration is that people on COBRA aren't paying 1/3 or 1/5 like those employed, by law they are paying the full load plus 2% administrative fees (102%).

I have a call into 2 companies to inquire about this, and have left a message for my Senator's staff. The open question from the businesses is that they simply don't know yet as it is going to vary by state (how much wasn't used based on how many people in which state to even determine the amount), so can be complex to calculate and "distribute" if that is the plan.

People on COBRA were already paying through the nose to keep their coverage - they should not fall through the cracks on how the refunds are applied. I plan to start a thread when I have more information about this, specifically from my Senator's office in regards to how this law is supposed to be applied when the refunds are received - given that no one seems to know that answer anywhere I have looked.

sinkingfeeling

(51,279 posts)
2. I believe that the rebates are to the employer for what that employer paid for
Tue Jul 31, 2012, 02:25 PM
Jul 2012

the policies. Only direct checks are to people who had private policies.

haele

(12,581 posts)
3. Yup, just got a letter from Cigna telling me that my employer got a rebate for provided coverage.
Tue Jul 31, 2012, 03:08 PM
Jul 2012

And that the premium out of my bi-weekly check should now be lower by about $2.00 a paycheck as part of the compliance requirements. Of course, Cigna is no longer part of our company health care plan, so I'm waiting to see how much Aetna intends to comply by.

Whatever it is, it will cause my taxes to increase by around 5 cents for every doller they "save" me in the pre-tax health dollars.


Haele

Ruby the Liberal

(26,217 posts)
4. My senator's office called me back this morning on this.
Mon Aug 13, 2012, 12:16 PM
Aug 2012

If the employer was a large employer, the chances are very good that they are self-funded, using an insurance company to administer the paperwork. Self-funded employers are exempt from the medical loss ratio requirements that trigger the rebates - so this law (medical loss ratio, % spent on actual healthcare) does not apply to them. The only way to know if your employer/former employer is self-funded is to call them and ask.

There is also no provision in the law that says former employees must be accommodated by medical loss ratios that were not met if there is a rebate in play (ie, non-self-funded). The rebate belongs to the employer, who is free to extend wellness care or premium subsidies to current employees, without extending to former employees who are not eligible to take advantage of the savings going forward. The only stipulation is that the money must be used for healthcare - as noted above.

Wish that news was better, but thats what they told me, so passing it along.

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