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Health Care Insurance Rebate Checks: 80-20 Rule

Starting August 1st, you might see a check from your health insurance provider in your mail box. Not everyone will be getting one but if you do see one, you can thank the Affordable Care Act [3]. The ACA has a provision in which it mandates that health insurers must spend at least 80% of collected premiums on you. The 80-20 rule, as it’s called, means that a maximum of 20% of premiums collected can go towards administrative costs, bonuses, ads, and other non-healthcare related items.

It’s estimated [4] that 12.8 million Americans will receive a check or rebate this month as a result of this rule taking effect (technically, it went into effect in 2011 with the first payouts now). It’s believed that insurance companies have to return $1.1 billion to consumers with the average family getting $150. Some rebates will be higher, depending on how little insurers paid out.

If you have individual insurance, then the insurer will mail you a check. If you have group insurance through your employer, then the employer will get the check. In the case where the employer gets the check, the employer can pay all the participants/employees or use the proceeds to pay future premiums. The employer can’t keep it.

What this also probably means is that you might start seeing illegitimate checks in the mail too, as I’m sure scammers will try to do something nefarious. So if the letter isn’t from your insurance provider, or your employer, be wary of it.