The federal agencies recently issued guidance about the treatment and distribution of rebates from insurance carriers under the new minimum loss ratio (MLR) rules included in the Patient Protection and Affordable Care Act (PPACA, or health reform). (Note: these rules will only affect insured group health plans, not self-funded programs.) Under this newly published guidance, churches and government entities* must comply with special rules that differ significantly from the obligations facing ERISA plan sponsors. (For information about MLR implications for ERISA programs, please see the HUB International Client Bulletin at the link shown at the conclusion of this article.)

Advance planning – especially for churches – can protect the employer from compliance missteps and potential loss of the employer’s share of the rebate. If your church or government health plan has one or more insured health plan options, you should consider adopting a simple plan amendment that directly addresses how such rebates are handled, as described below. Please address the sample amendment with your HUB International insurance advisor.

Click here to download the 'Church and Government Plans: Addressing Carrier Rebates under PPACA' HUB International Client Bulletin in full.