Q. - Our CFO told me the company received a check from our health plan insurer, along with a note saying it is a Medical Loss Ratio rebate payment. Can we just keep the check and put it in the general account for company expenses?
A. - Probably not. The MLR rebate is a payment your company is receiving because the insurer spent more than the permitted amount on non-medical expenses in 2011. The payment is a "refund" of premiums to you as sponsor of your health plan and the insurance policy holder. You should conduct an analysis to determine what portion of the payment has to be given back to employees and what portion of the payment the company can keep. You will also have to decide who will receive a portion of the rebate, if you will distribute amounts to former employees or COBRA participants, and what form the rebate will take (cash amount or credit for premium payments due). Don't ignore the payment- it must be properly used within 3 months.