Health Insurance Companies Send Refund Checks to Three Million Americans
Three million Americans will be getting a pleasant surprise in the mail – a refund check from their insurance provider.
That’s because of a provision in the Affordable Care Act. It limits how much insurers can spend on administrative costs. This includes salaries, sales or advertising.
Depending on who they cover, the insurance companies now must spend between 80 and 85 percent of customer premiums on patient care.
Insurers will refund $1.1 billion this year, according to the Department of Health and Human Services.
The average rebate will be $151 per household, with the highest in Vermont ($807 per family), Alaska ($622) and Alabama ($518), according to the New York Times.
No rebates will be issued in New Mexico or Rhode Island, because insurers there met the 80/20 requirements.
The law requires insurers to give out annual rebates by Aug. 1st.