MLR Rebates

[Crabcake Johnny]

In talking to a few agencies regarding this, they expressed to me that they'd sue. Some agencies have their agents assign commissions, which means they'd take a huge hit.

Between what would be the definition of bad press to likely legal action, it would be a very poor move.

 

[Yagents]

Maybe we should hire Occupy Wall Street to squat in their parking lots

 

[somarco]

Most carriers will not have rebates and the ones that will seem to be on the order of 1 - 2%.

What I posted was a rumor. If you want to get your panties in a wad over something that may or may not happen, go for it.

I don't like it any more than the rest of you but it is what it is. I am not going to lose any sleep over it. Moving on with other things.

Who the hell is NOLHA?

This whole MLR rebate has bigger issues than a possible agent chargeback. Of course Congress, who never read the law before passing it, never considered the tax issues of rebates or possible DOL violations if the employer does not pass the rebate on to plan participants.

 

[Yagents]

All of this crap for a $127?

http://money.cnn.com/2012/04/26/pf/health-insurance-rebate/

The Catch: Aetna and Rebates | LifeHealthPro
In the individual market, about 3.3 million people, or 31% of holders of individual coverage, could get a total of $426 million rebates, and their rebates could average $127 per recipient.

 

[VolAgent]

This whole MLR rebate has bigger issues than a possible agent chargeback. Of course Congress, who never read the law before passing it, never considered the tax issues of rebates or possible DOL violations if the employer does not pass the rebate on to plan participants.

So in the case of employer plans, who does the rebate belong to? What if the plan is completely employer paid?

 

[somarco]

who does the rebate belong to? What if the plan is completely employer paid?

Rebates belong to those who paid premiums. If 100% employer paid (scarce as hen's teeth) money belongs to employer. Otherwise it is split up pro-rata.

 

[stuy119]

Rebates belong to those who paid premiums. If 100% employer paid (scarce as hen's teeth) money belongs to employer. Otherwise it is split up pro-rata.

And then reimbursed as taxable income. Which means that $127, after being split 50/50, for example, becomes $45 or so in an EE paycheck.

As Joe Biden would say, that's a big freaking deal.

 

[VolAgent]

And then reimbursed as taxable income. Which means that $127, after being split 50/50, for example, becomes $45 or so in an EE paycheck.

As Joe Biden would say, that's a big freaking deal.

Yes, but it was deducted pre-tax from the paycheck. You can argue a million ways how it seems to be wrong, but that is proper. Now for individuals who get a refund, it should be tax-free as the premium was paid with after tax money.

 

[somarco]

Yes, but it was deducted pre-tax from the paycheck. You can argue a million ways how it seems to be wrong, but that is proper. Now for individuals who get a refund, it should be tax-free as the premium was paid with after tax money.

If the employee share was part of a 125 plan, that employee agreed to reduce their salary to pay a portion of the premium. When (if) the premium is rebated to the employee, the return becomes taxable.

Beyond the minutiae of divvying up the rebate there is the issue of the employer keeping all the money rather than go through the trouble of accounting for who get's what. If the plan is contributory that raises the specter of DOL violations.

Oh what a tangled web we weave . . .

 

[stuy119]

If the employee share was part of a 125 plan, that employee agreed to reduce their salary to pay a portion of the premium. When (if) the premium is rebated to the employee, the return becomes taxable.

Beyond the minutiae of divvying up the rebate there is the issue of the employer keeping all the money rather than go through the trouble of accounting for who get's what. If the plan is contributory that raises the specter of DOL violations.

Oh what a tangled web we weave . . .

Yes, but that means more fines that can be charged to businesses for violations.