Boston, June 26, 2013 — Four state health insurers will return a total of $57.5 million to small employers and individuals over the coming weeks because too many premium dollars collected last year went into administrative expenses and surpluses rather than medical care.
The rebates from Massachusetts health plans were about 3.2 percent more than the $55.7 million refunded last year under the state’s “medical loss ratio” requirement that at least 90 percent of premiums be used to pay doctors and hospitals for care. “This will put money back in the pockets of small businesses and individuals,” said Barbara Anthony, the state’s undersecretary of consumer affairs and business regulation. “It’s a reflection of the high standards we have in Massachusetts for protecting consumers.”
Insurers will begin sending out notices and checks next week to customers in the small group market, which includes nearly 720,000 people. About 85,000 of them are sole proprietors and others who buy health insurance as individuals. The rest work for tens of thousands of businesses and other small employers that will receive the rebate checks. Those employers must use the rebates to reduce next year’s health expenses or invest in wellness programs for employees. Employees who work for the small businesses won’t receive individual rebates.