Insurance Companies Face Giving Refunds Under the Affordable Care Act

The Affordable Care Act ushered in a lot of change into the healthcare industry that is affecting insurers as well as those that are purchasing the insurance. One example of this is a new stipulation under the Affordable Care Act that requires all insurers to spend a minimum of 80 percent of their premiums on medical care. Insurers that do not meet this figure are required to issue refunds.

The Los Angeles Times recently reported that one of the biggest insurers that was affected by this new regulation was Blue Shield of California. They did not meet the 80 percent figure – according to the Times, they only spent 76.8 percent of their premiums on medical care, falling just short of the Affordable Care Act’s required number. This has resulted in Blue Shield of California owing a total of $82.8 million in rebates to its customers, including both consumers and small employers. Broken down further, they will have to pay roughly 400,000 individual consumers around $61.7 million in total. This works out to an average rebate of $136. They will have to pay roughly 19,000 small businesses a total of $21.1 million.

According to Blue Shield of California, it plans on sending out rebate checks and letters to all of its eligible consumers by September 30th of this year. The main reason that they missed the 80 percent threshold established by the Affordable Care Act, according to Blue Shield of California, is because of the enrollment uncertainty of the new act. However, Blue Shield of California is the only major insurer that is being forced to send out rebates to their individual customers and small employers. The other major California-area insurers, including Anthem Blue Cross and Kaiser Permanente, have released statements that they were able to meet the 80 percent threshold and that they do not owe any refunds for this year.

For additional information about the rebates owed by Blue Shield of California, or for information about the Affordable Care Act and health insurance in general, be sure to contact us at the Benefits Store today.