Health insurers poised to pay $1 billion in rebates to 8.2 million people this year

There’s a chance your health insurance company owes you some cash.

Depending on how you get your coverage, you may be one of the 8.2 million policyholders expected to get a piece of $1 billion in premium rebates this fall from various insurers, according to a preliminary analysis from the Kaiser Family Foundation.

The amount is down from $2 billion issued in 2021 and a record $2.5 billion in 2020.

“In the last couple of years we’ve seen some really large rebates — twice the size of this year’s amount,” said Cynthia Cox, a vice president at the foundation and director of its Affordable Care Act program. “But I’d say $1 billion is still significant.”

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Generally, you’re more likely to see a rebate if you have an individual policy (including through a state health exchange or the federal one) or participate in a small- or large-group plan. (Many of the biggest U.S. employers choose to self-insure, which means their plans don’t have to adhere to certain requirements placed on insurance companies. Different rules also apply to Medicare and Medicaid coverage.)

So why are the rebates going out?

Basically, insurance companies that sell group or individual policies must adhere to a “medical loss ratio” requiring them to spend at least 80% of premiums paid by enrollees on health-care costs and certain other expenses related to patient health. (For large group plans, the ratio is 85/15.) If that threshold is not met, enrollees are reimbursed the difference.

Each year, the ratio is calculated based on a rolling three-year average. So the rebates this year derive from insurance companies’ financial data from 2019, 2020 and 2021.

This year’s refunds — which will go to eligible participants enrolled last year — work out to about $141 per plan participant in the individual market, $155 in the small group market and $78 in large group plans, according to the Kaiser analysis. However, that amount can vary widely, depending on your location and insurer.

Insurers typically either send a check to policyholders or deduct the rebate from premiums (and send a check to individuals no longer enrolled but owed some money). Be aware that if you are in a group plan, your employer may split the rebate with you, Cox said.

If you’re entitled to a rebate, you should receive it by Sept. 30.