Los Angeles counsel Heather Abrigo was quoted in a Society for Human Resource Management article about medical loss ratio (MLR) rebates and how they should be distributed.

In early August 2012, some U.S. employers with fully insured employee health benefit plans received an MLR rebate, mandated under the Patient Protection and Affordable Care Act when health insurers do not spend at least a certain percentage of the prior year’s health insurance premiums on health care services.

As of September, employers that are eligible for this rebate should have received the rebate check and must decide what they are required to do with those funds and what options they may have within 90 days.

The good news is that employers have some leeway when it comes to distribution. Heather said her interpretation of the [available] guidance was that “the Department of Labor does not want employers to have to spend hundreds of dollars to give someone a $20 rebate.”

If the employer, however, decides not to issue rebate checks to individual employees—for example, because the amounts are too small to justify the cost—it is important for employers to communicate that decision to employees and the reason for it as soon as possible. In these situations, “employees are expecting to get a rebate and so employers can’t just ignore it,” said Heather.

Source: SHRM Online