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What should employers do with a Medical Loss Ratio (MLR) Rebate?

According to the guidelines set by the California Department of Insurance and the Department of Labor, if an employer is the policyholder and pays a portion of the premium for group health insurance, the MLR rebate must be used for the benefit of the employees covered under the group health plan. Employers have several options for distributing the rebate:

1) Premium Reduction: Employers can reduce the employees' portion of the annual premium of future premium payments for all subscribers covered under any group health plan offered.
2) Employers can reduce the employees' portion of the annual premium for the following policy year for only those subscribers covered by the group health plan for which the rebate was provided.
3) Cash Rebates: Employers may also distribute cash rebates directly to employees.

Remember:
-Current COBRA participants must be included if they are enrolled in the plan with the MLR Rebate.
-Not all plans will receive an MLR Rebate.
-Always remember to consider the tax treatment for the MLR Rebates issued to employees.

As always, please don't hesitate to contact MNJ Insurance Solutions. We'd love to help!

(714) 716-4303 - www.mnjinsurance.com