June 21. 2012 11:00AM - Last modified: June 21. 2012 11:36AM

Health insurers to rebate $10.4 million to Wisconsin customers

  
Health insurance companies will be required to provide $10.4 million in rebates to Wisconsin consumers under a provision of the Affordable Care Act health care reform law, the U.S. Health and Human Services Department announced today.

Health and Human Services (HHS) Secretary Kathleen Sebelius said that 12.8 million Americans will benefit from $1.1 billion in rebates from insurance companies this summer, because of the Affordable Care Act’s 80/20 rule.  These rebates will be an average of $151 for each family covered by a policy.
However, the fate of the Affordable Care Act is still subject to a Supreme Court ruling on its constitutionality. That ruling is expected to be announced soon.
The health care law generally requires insurance companies to spend at least 80 percent of consumers’ premium dollars on medical care and quality improvement. Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales, and advertising. Beginning this year, insurers must notify customers how much of their premiums have been actually spent on medical care and quality improvement.
Insurance companies that do not meet the 80/20 standard must provide their policyholders a rebate for the difference no later than Aug. 1, 2012.  
The HHS Department today said that Wisconsin consumers will receive nearly $10.4 million in rebates from insurers that did not meet the 80/20 standard. Individual market consumers in Wisconsin will receive $649,028 in rebates, the small group market in Wisconsin will receive $2.95 million in rebates and the large group market will receive $6.77 million in rebates.
According to HHS, consumers owed a rebate will receive it in one of the following ways:
•    a rebate check in the mail;
•    a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card;
•    a reduction in their future premiums; or
•    their employer providing one of the above, or applying the rebate in a manner that benefits its employees.
Insurance companies that do not meet the 80/20 standard will send their policyholders a rebate for the difference no later than Aug. 1.

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