FAQ's for Individuals - I received a rebate

Overview


1.0 Q: If my plan will be terminating, why am I receiving a rebate check?

A. The rebates are based on your 2014 coverage. Eligible policyholders with active coverage in 2014 will receive rebates if the insurance company didn’t meet the minimum Medical Loss Ratio (MLR) for 2014.

1.1 Q: What is the Affordable Care Act?

A. The Affordable Care Act is a shortened name for the Patient Protection and Affordable Care Act (PPACA), a federal statute signed into law in March 2010 and commonly referred to as “health care reform.”

1.2 Q. What does “Medical Loss Ratio” mean?

A. The Medical Loss Ratio, or MLR, is the percentage of the total premium dollars received by a health insurance plan that is spent on health benefits (including claims and health improvement programs) for the plan’s customers in a particular state. For example, if an insurance company sold a plan called an “Individual Medical Red Plan,” and received $1,000,000 in premium payments from all customers with that plan in 2014 in that state, and paid out $800,000 in claims and other health benefits for that plan in 2014 in that state, the MLR would be 80% ($800,000 ÷ $1,000,000). The MLR consists of dollars spent on health benefits. Other costs incurred by the insurance company – administration, employee salaries, marketing, etc. – do not count toward the MLR.

General


1.3 Q. Who is getting a rebate?

A. Eligible policyholders (individuals and group employers) with active coverage in 2014, by insurance plans subject to the Affordable Care Act, will receive health care reform rebates if the insurance company didn’t meet the minimum Medical Loss Ratio (MLR) for 2014." In general, the minimum MLR threshold is 80% for individual and small group customers.

1.4 Q. What types of health insurance does the MLR rule apply to?

A. The MLR rule applies to major medical insurance plans for individuals, families, large groups and small groups, as dictated by health care reform.

1.5 Q. What types of health insurance are not affected by the MLR rebate?

A. The MLR does not apply to short-term (temporary) medical plans, self-funded group plans, supplemental coverage plans or fixed-benefit plans such as Assurant Health AccessSM.

1.6 Q. Do other health insurance companies have to send rebates?

A. All health insurers in the United States that sell plans subject to the Affordable Care Act have to send rebates by September 30, 2015 if those plans didn’t meet MLR requirements for 2014.

1.7 Q. Where can I find more information about the MLR?

A. The federal government has set up a website: https://www.healthcare.gov/health-care-law-protections/rate-review/ Diagonal Arrow

1.8 Q. Will I receive a rebate next year?

A. At this time, we aren’t able to determine if you will receive a rebate next year or not. Future rebates are based on claims paid and premium received for each year in a particular state and won’t be known until August of the following year.

1.9 Q. Will I have to pay part of this rebate back to you if I cancel my policy?

A. No. The rebate is based solely on what you paid for premiums in 2014. It is not affected by any current year activity.

1.10 Q. I received someone else’s check. What should I do?

A. All inquiries must be submitted in writing to PO Box 624, Milwaukee, WI 53201-0624.

1.11 Q. My check was lost, stolen or thrown away. How can I get a replacement?

A. All inquiries must be submitted in writing to PO Box 624, Milwaukee, WI 53201-0624.

Calculation


1.12 Q. How can I find out exactly how my rebate was calculated?

A. Your rebate was calculated based on your medical premiums paid to Assurant Health for health insurance applicable to the period of coverage from January 1, 2014 through December 31, 2014.

Any premiums due for non-medical benefits, like Life, Dental or Accident coverage, were not included in this calculation.

The calculation from Health and Human Services adjusts your medical premium to subtract any Federal or State taxes, assessments, and licensing or regulatory fees we were required to pay.

This amount is multiplied by the percentage indicated in the letter that accompanied your rebate check.

An additional adjustment is required for the overall state rebate amount.

These calculations comply with Federal guidelines and were submitted to Health and Human Services for review.

1.13 Q. How does an individual's claims activity affect individual rebates?

A. Rebates are not based on the personal claims activity of any individual. Rebates are based on overall health care claims activity that occurred in 2014 and if applicable in 2011, 2012 and 2013 for everybody in the state with the type of insurance policy to which the rebate applies.

1.14 Q. Why did my state apply for a lower ratio? This impacts my rebate.

A. Some states were concerned that meeting the 80% Medical Loss Ratio standard would destabilize the individual health insurance market and provide fewer choices for their residents. More information can be found here: https://www.healthcare.gov/health-care-law-protections/rate-review/ Diagonal Arrow

1.15 Q. Does the government calculate Assurant Health’s MLR, or is it calculated by Assurant Health?

A. Assurant Health calculates the rebate based on claims paid and premium received. We report this information to the U.S. Department of Health and Human Services (HHS) based on the guidelines they provide.

1.16 Q. Whether or not I receive a rebate, and how much that rebate is, is dependent on the group of policies that my policy is a part of. How is that group determined?

A. Parameters include: Whether your policy is individual medical, small group or large group coverage. The state in which the policy is issued. The legal entity that underwrites and issues the policy — Assurant Health is the brand name for insurance underwritten and issued by Time Insurance Company, John Alden Life Insurance Company and Union Security Insurance Company.

1.17 Q. Don’t you owe me interest on this?


A. The U.S. Department of Health and Human Services (HHS) does not require that insurers pay interest on rebates.

1.18 Q. I moved to another state, why was my rebate based on my old address?

A. Per health care reform, rebates are based on the state in which the policy is issued, not where the policyholder lives or works.

Rebate Distribution


1.19 Q. I had two policies with you last year. Why did I only receive one rebate?

A. Whether or not a rebate is sent for a given policy is dependent on several parameters, including:
  • Whether your policy is individual medical, small group or large group coverage
  • The state in which the policy is issued
  • The legal entity that underwrites and issues the policy — Assurant Health is the brand name for insurance underwritten and issued by Time Insurance Company, John Alden Life Insurance Company and Union Security Insurance Company

Another possibility is the policy for which you did not receive a rebate satisfied the minimum MLR requirements.

1.20 Q. Why did I receive multiple checks?

A. You received multiple checks if you had multiple active policies subject to the MLR in 2014, and the minimum MLR threshold was not satisfied with respect to more than one of those policies.

1.21 Q. Who are you sending the rebate to?

A. Rebates are being sent to the primary insured on the policy, unless the primary is less than 18 years of age. If the primary insured is less than 18 years of age, the rebate is being sent to the payor listed on the policy.

1.22 Q. I’m the payor for the policy. Why wasn’t the rebate sent to me?

A. The policy is owned by the primary insured. Once premiums are paid, they become a part of the policy, and any rebate or refund is directed to the policy owner if 18 years of age or older. If the primary insured is under 18 years of age, the refund will go to the payor.

1.23 Q. My rebate was very small. Why did you send rebates for small dollar amounts?

A. Per health care reform, any rebates of $5 or more for individuals and $20 or more for employers are being sent to the customers.

1.24 Q. In the future, could you apply the rebate to my premium?

A: We will be looking at this possibility for future rebates.

1.25 Q. I am no longer insured by your company. Why did you send me this rebate?

A. The rebates are based on 2014 coverage. Anyone who had coverage any time during 2014 may qualify for a rebate (if the MLR minimum threshold was not satisfied), regardless of current customer status.

1.26 Q. Why did I receive a separate rebate from my state? How is this different from the rebate you sent me?

A. The MLR rebate dictated by health care reform is a federal law. However, some states also have similar rebate provisions that are calculated independently from the federal rebate.

Premium Impact


1.27 Q. Will the rebate impact renewals?

A. Rebates do not affect your ability to renew your plan, or your renewal rates. Because the rebate is based on actual past spending activity, and renewals are based on projected future spending activity, there is no relationship between them.

1.28 Q. How does the rebate affect current premiums?


A. Your 2015 rates are calculated separately from this rebate and are not directly affected by it. Premium rates are calculated based on projected future health care costs, whereas these rebates are based on actual past health care spending for the year 2014 and if applicable in 2011, 2012 and 2013.

1.29 Q. Can I have my refund applied to future premium payments?

A. No, that option is not available for the 2014 rebates.

1.30 Q. Why didn't you just credit this to my premium?

A. We surveyed our customers and found that most would prefer a refund instead of a credit toward their premium. In addition, this is your money and we wanted to put this in your hands and give you the option of using it as you choose.

1.31 Q. How does the premium that I paid impact the rebate amount?

A. The premium is only one piece of the rebate calculation; there are many other factors. This rebate amount is based on premium for coverage for the period of January 1 through December 1, 2014.

MLR Premium includes premiums due for the following:
  • Medical Coverage
  • Drug Coverage
  • Any fees, such as Administration Fees
  • Refunds for premium corrections for medical coverage in 2014 paid or credited prior to March 31, 2015

Does not include federal MLR rebates or state rebates received in 2014 or premium due for:
  • Life Coverage
  • Supplemental Coverage such as Dental, Accident, Critical Illness, etc.
  • Short Term Medical
  • Group Self-Funded
  • Fixed Benefit Health Plans

Once Assurant Health has calculated your 2014 premium due, we make a final deduction to account for State and Federal taxes. (Deductions vary by state.) The final amount is your 2014 MLR Premium. This calculation is performed in accordance with health care reform MLR requirements.

Taxes


1.32 Q. Do rebate recipients have to pay taxes on the rebate?

A. The IRS has a web page that may assist you in answering this question: http://www.irs.gov/newsroom/article/0,,id=256167,00.html Diagonal Arrow. However, we recommend that you consult with your tax advisor for purposes of making this determination.

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