Washington, DC -- Health and Human Services (HHS) announced on Thursday that 217,000 North Carolinians will share $18.7 million in rebates from insurance companies this summer.
The rebates are going to be handed back to customers due to the Affordable Care Act's 80/20 rule. The rule requires insurance companies to spend 80% of consumers' premiums on treatment and quality improvement. The remaining 20% is spent on administrative fees, salaries, and advertising.
When companies don't meet the 80/20 standard, they will be required to send their customers a rebate for the difference by no later than August 1, 2012. The average rebate is expected to be around $158.
"The 80/20 rule helps ensure consumers get fair value for their health care dollar," Secretary Sebelius said.
North Carolinians owed a rebate will see their value reflected in one of the following ways:
• a rebate check in the mail;
• a lump-sum reimbursement to the same account that is used to pay the premium if by credit card or debit card;
• a reduction in their future premiums; and
• their employer providing one of the above, or applying the rebate in a manner that benefits its employees.
For a detailed breakdown of these rebates by State and by market, please visit:
For the text of these proposed notifications, please visit: http://cciio.cms.gov/resources/other/index.html#mlr
For more information on the MLR provision in the Affordable Care Act: http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html
For more information on how the Affordable Care Act is creating a transparent market for health insurance, visit:
Department of Health and Human Services