Colorado consumers with health insurance will benefit from $27.5 million in rebates from insurance companies this summer, because of the Affordable Care Act’s 80/20 rule.
The rebates will go to 208,000 people and will average $227 for each Colorado family.
The health care law requires insurance companies to spend at least 80 percent of premium dollars of medical care and quality improvement, a rule known as the medical loss ratio. The remaining 20 percent can go to administrative costs like salaries, sales and advertising. Starting this year, insurers must notify customers how much of their premiums have been spent on medical care and quality improvement.
Companies that do not meet the 80/20 standard are required to provide a rebate for the difference by Aug. 1.
Coloradans owed a rebate will get a check in the mail, a lump-sum reimbursement to the account that is used to pay the premium, a reduction in future premiums. Employers must use the money in a manner that benefits its employees.
The information will be publicly posted on healthcare.gov this summer, allowing consumers to leanr what value they’re getting for their premium dollars.