RALEIGH, N.C. (WNCN) – Insurance Commissioner Wayne Goodwin announced Monday that almost $8.5 million in rebates is to be issued to approximately 162,000 health insurance policyholders in North Carolina.
United HealthCare, a national healthcare company based out of Minnesota, has to return $4.895 million, the Department of Insurance said.
It was not immediately clear when all the checks would be mailed.
The rebates are a result of the federal 80/20 rule, the Department of Insurance said in a news release.
The 80/20 Medical Loss Ratio Rule requires insurers in the individual and small group markets to spend at least 80 percent of premium dollars on health care and activities that improve the quality of health care. That way, the insurers are limited to no more than 20 percent on administrative costs.
In the large group market, insurers must spend at least 85 percent of premiums on health care and quality improvements.
Insurance companies that fail to meet this standard owe policyholders a refund. Refunds are paid directly to consumers who purchase their own insurance as a check in the mail, a reimbursement or a direct reduction in future premiums, the state said.
For consumers who bought insurance through their employer, the rebate is usually paid to the employer, who must provide the employee’s share as a check, reimbursement or reduction in future premiums, or apply it in some manner that benefits employees.
The following chart shows the three companies issuing the most in rebates in North Carolina by market for plan year 2014:
Individual Market (purchased as individual, not employer)
- Golden Rule Ins Co.: $756,673
- Connecticut General Life Ins. Co.: $541,299
- Mid-West National Life Ins. Co. of TN.: $530,631
Small Group Market (under 51 employees)
- UnitedHealthcare Ins. Co.: $4,118,018
- Coventry Health and Life Ins Co.: $411,587
- Madison National Life Ins. Co.: $116,543
Large Group Market (more than 50 employees)
- UnitedHealthcare Ins Co.: $777,386
- CIGNA HealthCare of NC: $588,765
- Coventry HealthCare of the Carolinas: $421,192