Refund checks from health insurance companies should be in the mail

Your check really might be in the mail.

By August 1, health insurance companies have to refund $1.1 billion inpremiums to about $12.8 million customers, due to the Affordable Care Act.

The "80/20 rule" in the ACA mandates that health insurers spend atleast 80% of their customers' premiums on health services, leaving no more than20% for administrative costs and advertising. That means if an insurancecompany spends 78% of the money it collects on health benefits for customers,it has to send rebate checks for the additional 2%.

"The 80/20 rule in the Affordable Care Act is intended to ensure thatconsumers get value for their health care dollars," a letter accompanyingthe refund checks says.

Connie Kadansky recently received a $79 rebate check from her Arizonainsurance company due to the rule.

"It was a surprise," says Connie Kadansky, who is self employed."My insurance agent tells me that my insurance is going to skyrocket. Hehates Obamacare. I read the letter and I said to myself, 'So what's wrong withthis? This is good.'"

There's no way to know ahead of time if you qualify for a rebate, andalthough checks average $151 per household, there's a lot of variability. Checksize depends on how your insurance company collected and spent premiums overthe past year, specifically in your state.

In St. Louis, Rabbi Randy Fleisher received a $2,808 rebate check earlierthis month for his synagogue, which pays 100% of the health insurance premiumsfor its nine full-time employees.

His Central Reform Congregation advocated for the Affordable Care Act andhelped start "Missouri Healthcare for All."

"There's no doubt that it's a positive family value for people to haveassurance that medical care will be coming to them in a way that's affordableand available, " says Rabbi Fleisher. "When you're sick, when thereare health care challenges, that's about as vulnerable as you can get."

Not all rebates will come as checks in the mail. Companies have the optionto refund credit cards used to pay premiums, or discount future premiums.

Insurers also decide under the health care law whether to charge customersmore money upfront, knowing that they might have to refund that money later.

"The presence of a rebate should not be viewed as a sign that aninsurer is deliberately over-charging its customers," says Adam Powell, ahealthcare economist who consults for insurance companies.