Woo-Hoo, We Got a Rebate! What Can Employers Do With "Medical Loss Ratio" Rebates?

27 July 2012
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Key takeaways:

  • Employers that fully insure their employee health care benefits may have received or may soon receive a “medical loss ratio” rebate from their insurance provider. The rebates must be sent by August 1, 2012.
  • Some or all of the rebate may be “plan assets” subject to the Employee Retirement Income Security Act of 1974 (ERISA). To the extent the rebate is a “plan asset,” the employer or plan administrator has fiduciary responsibilities regarding the use of the rebates, which must be used for the benefit of the employees covered by the policy.
  • This Client Update provides guidance on an employer’s and plan administrator’s ERISA fiduciary responsibilities regarding the rebates.