ConsumerWatch: Some Californians To Receive Health Insurance Rebates

SAN FRANCISCO (CBS 5) — More than a million Californians will receive rebates from their health insurers next week. The refunds are the first tangible results of the federal health care overhaul.

Consumer advocate Beth Abbott said the checks are a result of some insurers failing to meet the so called “80/20 rule.”

Under the new health care law, insurers are supposed to spend a minimum 80 percent of premiums on actual health care costs. Non-medical expenses such as marketing and salaries are limited to 20 percent. If insurers fail to meet those thresholds, they must give the money back to consumers.

Since six of the state’s largest health care insurers didn’t meet the threshold last year, 1.8 million Californians will be getting rebates, which are due by August 1st.

The rebates are expected to average $65 per family in California, but won’t necessarily come as a check in the mail. Insurers can also issue premium discounts, or a credit on a card.

If you have a company sponsored plan, your employer gets the rebate and is expected to share it with you.

No matter how you get your money, Abbott said, “I think they’ll be paying more attention this coming year because it means they have to reduce advertising, marketing, CEO salaries and redirect that to things that actually pay for consumer health care.”

If you don’t get a letter from your insurer or employer, give them a call. Or you can contact the California Department of Insurance Consumer Hotline at (800)927-4357 or go to for information about your insurer.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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