Cigna, two UnitedHealthcare subsidiaries will issue rebates to TN policyholders

Health Insurers Issue Rebates to TN Policyholders

Cigna and two UnitedHealthcare subsidiaries are among health insurers planning to issue rebates to Tennessee policyholders because the companies didn’t spend the required percentage of premium revenues on medical care last year.

Cigna’s large-group customers are eligible for rebates totaling $92,976, down from $6.2 million returned last year, said Phil Mann, spokesman for the insurer. The checks, which are to be mailed out by Aug. 1, are a result of Cigna spending 84.8 percent of premium revenues from large-group plans on medical care and quality improvement efforts last year. The company was required to hit 85 percent to avoid paying rebates.

Meanwhile, roughly 15,600 customers of UHC’s Golden Rule Insurance Co. who buy their own health insurance will share in $1.37 million this year, while 376 individual customers of that insurer’s UnitedHealthcare Life Insurance Co. subsidiary are due $327,736 in rebates. Last year, the average rebate from those UHC companies in Tennessee was $127.47 a person; this year’s rebate will be less than half that, said Ellen Laden, a company spokeswoman.

The Affordable Care Act requires insurers to issue rebates if spending of premium revenues on medical care and quality improvement efforts falls below required thresholds. The so-called medical loss ratio requirement is intended to funnel a bigger chunk of premium dollars into actual medical care versus administrative costs.

The law requires insurers to spend at least 80 percent of premiums received from small groups or individuals on medical care. For large groups, insurers are required to spend 85 percent of premium revenues on medical care.

No Blues rebates

The state’s largest health insurer, BlueCross BlueShield of Tennessee, has said its policyholders won’t get rebates this year because all of its business lines met the medical loss ratio requirements last year. That wasn’t the case in 2011, so the insurer returned $8.6 million to individual policyholders last year. All Savers Insurance Co., another affiliate of UHC, also won’t have to distribute any rebates this year, according to latest tracking by the Tennessee Department of Commerce and Insurance.

UnitedHealthcare Life Insurance Co., formerly American Medical Life Insurance Co., hasn’t offered health plans in Tennessee for several years but has a few hundred customers left in the state that kept their coverage. Golden Rule continues to offer health plans to individuals and families across Tennessee.

Cigna won’t be issuing rebates to individual policyholders who bought their own coverage last year because its medical loss ratio for that group was 92 percent, well above the 80 percent requirement for individual and small-group plans. Cigna’s small-group clients aren’t eligible for rebates because the insurer doesn’t have enough members in that category to qualify for rebates, Mann said.

Humana expects to finalize and mail rebates in late summer in states where rebates are being issued, said Jeff Blunt, a spokesman for that insurer. Aetna, meanwhile, will pay a small rebate to individual plan members in Tennessee, but no rebates to small- and large-group clients, said spokesman Walt Cherniak.



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