This summer marks the roll out of the Obamacare rebates. Obamacare — the nickname for the Affordable Care Act — requires insurance providers to issue refunds if they fail to spend 80 percent of their collected premiums on actual health care services for participants. Yet most employees who receive health insurance through their employer will be sorely disappointed when it comes to a rebate check.
ABC News reports the Center for Insurance Information and Consumer Oversight says only about 3 million Americans will see actual money returned to their pockets. Instead, the remaining 6 million Americans insured through group health plans sponsored by their employer technically receive nothing.
The U.S. Department of Health and Human Services says redistributing portions of these premium payments is complex given that insurance premiums qualify for pre-tax deductions but refunds are currently categorized as taxable income.
In an effort to cut down on what many see as exorbitant administrative and general operating costs for major insurance providers in the U.S., Obamacare hoped to create an incentive for inefficient companies by requiring they refund the difference between what they actually spent on health care services and the newly mandated minimum of 80 percent.
The Centers for Medicare and Medicaid Services (CMS) says the largest refund will be in Washington State for about $500, with the average of $450 returned across the nation.
As for the 6 million group-plan enrollees? They will be lucky if they get some kind of “reduction in their future premiums” or “more generous [employee] benefits,” says the Center for Insurance Information and Oversight.
About the author
Kat Robinson is a regular contributor for SheKnows and loves to connect women to all the latest news. She currently lives in Scottsdale, Arizona and is a 2010 Jack Kent Cooke Scholar. Follow her on Twitter @katrobinson1