Every year, insurance carriers are required to meet specific Medical Loss Ratio (MLR) thresholds, ensuring that a significant portion of collected premiums goes toward medical care and improving healthcare quality. For the large group market, this threshold stands at 85 cents for every premium dollar collected, while in the small group market, it’s 80 cents. If these thresholds are not met, employers are in for a timely financial boost, in the form of premium credits or checks.

MLR Rebate Deadline: September 30, 2023

The clock is ticking. If your insurance carrier falls short of the MLR threshold, they are obligated to distribute MLR checks to employers by September 30, 2023. Importantly, these checks can include amounts attributed to employee contributions. Employers, in turn, must handle the distribution to employees and deal with any associated tax implications.

Self-Funded Plans Excluded

It’s essential to note that the MLR rebate check system doesn’t apply to self-funded plans. If your company has a self-funded healthcare plan, you won’t be eligible for these rebates.

Making Sense of MLR Rebate Checks

Receiving an MLR rebate check can be a boon for employers, but it’s not without its complexities. Here are some critical considerations:

1. Identifying Recipients: Determine who should receive the rebate, whether it’s current participants or former ones.

2. Choosing the Form of Rebate: Decide whether the rebate will be provided as a premium reduction or a cash distribution.

3. Tax Implications: Understand the tax impacts of the rebate. Both the employer and participants receiving the rebate may have tax consequences to consider.

4. Communication: Decide what, if any, communication should be provided to participants regarding the rebate. Clarity on how and why the rebate is being distributed can enhance transparency and employee satisfaction.

Want to Learn More? Download our PDF Guide!

This blog offers a brief overview of MLR rebates and their implications for employers. If you’re looking for a more in-depth understanding of this topic, we’ve prepared a comprehensive PDF guide. Download it below for detailed insights into navigating MLR rebate checks effectively.

Stay Informed and Share Your Experience

Have you received an MLR rebate check before? How did you handle it? Share your experiences and insights with us! Use #MLRRebateInsights to join the conversation on social media and connect with others who’ve gone through similar experiences. Your insights could be valuable to fellow employers navigating this process for the first time.

We’re committed to providing exceptional support, so please don’t hesitate to reach out to our dedicated Total Benefit Solutions health insurance specialists at (215)-355-2121. We’re here to answer any questions or address any concerns you may have.