Fairfax, Virginia (olaladirectory) October 16, 2018 – Business Benefits Group, a Northern Virginia benefits brokerage, recently released a blog educating readers on how medical loss ratio rebates work. The blog explains the purpose of these rebates and answers some common questions about how they are distributed.
Medical loss ratios are the percent of premiums that an insurance company spends on claims and other expenses that improve healthcare quality, such as programs that help patients manage serious conditions, hospital discharge planning, patient safety measures, and health and wellness coaching. Insurance companies are required to pay annual repates of the loss ratio for groups of policies issued in a state is less than 85 percent or 80 percent, depending on the type of employer. These provisions make sure that insurance companies do not spend too much money on administrative expenses and profits and are instead able to pay claims made by policyholders.
The blog explains a variety of questions that patients typically have about their rebates. Rebates are determined on a state-by-state basis, and they are based on all of the premiums and claims issued by an insurance company for a particular group of policies during the previous year. If claims for all policies in the group are lower than the required medical loss ratio percentage, everyone with those insurance policies will receive a rebate. Insurance companies typically set premiums each year based on the amount of claims they expect to pay, and variations in the actual amount paid may result in some groups of policies not receiving rebates. Rebates are taxable if the policyholder pays health insurance premiums with pre-tax dollars, or if they receive tax benefits by deducting premiums paid on their tax returns.
Speak with a benefits consultant for more information. Business Benefits Group provides businesses in the Northern Virginia area with a variety of services to help them maintain competitive benefits packages for their employees. These include benefits consulting, technology solutions, business insurance, executive planning, compliance, international coverage, retirement plans, and wellness solutions. The firm can be contacted online at https://www.bbgbroker.com or by phone at 844-201-3612. Business Benefits Group is headquartered at 4069 Chain Bridge Road, Top Floor, Fairfax, VA 22030.