If you pay for health insurance, you’re no doubt aware that it’s a considerable expense. This especially holds true if you’re self-employed and don’t get a subsidy on your premiums.
But there may be some good news for health insurance policyholders this year. Depending on the coverage you have, you may be in line for a nice payday from your insurer within the next few months.
Will you get a rebate?
Health insurance companies charge premiums that policyholders have to pay to secure coverage. And there are rules in place that dictate how insurance providers spend that money.
Health insurance companies that sell individual or group policies must stick to a specific medical loss ratio that requires them to spend at least 80% of premium funds collected on healthcare expenses/expenses related to patient care. When companies wind up with excess profits, they’re required to pay policyholders back.
That’s what’s happening this year. A report from the Kaiser Family Foundation has found that 8.2 million health insurance policyholders should be entitled to a piece of a $1 billion pool of rebate funds this fall.
Now generally speaking, you’re more likely to get a rebate if you have an individual health insurance policy or participate in a large or small group plan. Some of the country’s largest employers have their own special insurance plans that fall outside the aforementioned rules, so if you work for a major company that provides health insurance, you may not have a windfall to look forward to.
What’s more, different rules apply to Medicare and Medicaid. If you’re enrolled in one of those programs, you may not have money coming your way.
How will your rebate come in?
Typically, when health insurance companies are required to issue a rebate, they do so by mailing a check or by deducting the rebate amount from premium costs. If you’re owed money from an insurance company you no longer have coverage through, that company will have to send you a check, since you won’t have premiums to deduct from.
If you’re owed some money, you should receive it by Sept. 30. So far, Kaiser estimates that if you have individual insurance, you should expect a rebate of $141 per plan participant (so if you buy coverage for four family members, you’d get $564). If you’re part of a small group plan, you can expect $155, and if you’re part of a large group plan, you can expect $78.
Of course, these aren’t ground-breaking amounts of money. But seeing as how living costs have been soaring due to inflation, these days, every little bit of money helps. Your rebate could therefore be instrumental in helping you cover basics like rent, food, and utility costs.
And if you don’t need your rebate to cover essential expenses, do yourself a favor and stick that money into your savings account. You never know when your healthcare costs might rise down the line, so having that cushion is definitely a good thing.
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