Blue Cross Blue Shield of Michigan and Blue Care Network Provide Rebates to Small Business Customers

Several months after Blue Cross Blue Shield of Michigan announced that we are reducing insurance rates for many of our small employer customers in Michigan, another dose of good news is on the way.

Because of lower-than-expected medical costs in 2014, Blue Cross and Blue Care Network are able to refund many of our small employers (with fewer than 50 employees) a small percentage of their 2014 premiums.

A letter (with a check enclosed) will be mailed to more than 24,000 small employers by Sept. 30 to notify them of a rebate of just under 2 percent of their 2014 premiums paid for BCN and one-tenth of 1 percent of premiums paid for Blue Cross.

Why are Blue Cross and Blue Care Network providing rebates?
Plainly and simply, it’s the law.

Months in advance, our actuaries predict the expected use and cost of medical and pharmacy services.

Under the Affordable Care Act, 80 percent of a premium must go to health care claims for small group and individual coverage, and 85 percent for large group employer premiums. By this calculation, many of our small group customers qualified for a rebate this year.

We work every day to keep health care costs down and provide high-quality health care coverage for our customers. We’re committed to addressing health insurance costs through:

For example, our unique and comprehensive partnerships with doctors and hospitals — including our Patient-Centered Medical Home and Value Partnerships  quality improvement programs — are helping to manage medical trends downward by eliminating unnecessary costs and promoting better health for our members.

Do your groups get a rebate?
Managing agents will be contacting agents with groups receiving a rebate.

Timing and requirements
We are required to send rebates directly to employers. Employers are responsible for using the rebate according to federal requirements. For church and non-federal governmental plans, employers must either:

•    Use it to lower the subscriber’s portion of the premium for the upcoming year.
•    Give covered employees a cash refund of the rebate. The federal rules have a number of options for the employer to calculate this amount.

For the federal requirements on how to distribute the rebate if the group is not a church or governmental plan, please visit dol.gov/ebsa/newsroom/tr11-04.html.

We are also required to notify the groups’ employees of the rebate. We will mail this notification a week to 10 days after groups receive their checks. We will notify employers and their employees by Sept. 30, 2015.

Questions? Contact your Blue Cross or BCN sales representative or managing agent.