Annual employer obligations under federal Medical Loss Rebate rules are rapidly approaching. As a reminder, Medical Loss Rebate rules require health plans to spend a certain percentage of premium dollars received on medical care and health improvement policies for plan participants. For large groups, that percentage is 85% and for small groups, that percentage is 80%. Health plans that do not meet this threshold must provide rebates equal to the shortfall to plan participants.

Health plans were required to determine their percentage of premiums spent on medical care/health improvement by July 31. Any health plans who calculated a shortfall must now provide the rebate to plan participants by September 30.

Employers are required to provide the rebate to employees using reasonable, fair, and objective allocation. This may be through individualized rebates or, in the event that such disbursements are not feasible, through credit towards future participant payments or benefit enhancements. However the plan decides to use the rebate funds, it must be done solely for the benefit of the plan participants.