NC customers due rebates from health insurers

US health overhaul law forces insurers to rebate almost 200,000 customers average of $87 each

RALEIGH, N.C. (AP) -- Nearly 193,000 North Carolina customers will get rebates averaging $87 this summer because their health insurance company could not keep overhead costs down, the U.S. Health and Human Services Department said Thursday.

The money goes to consumers whose health insurer failed in 2012 to meet a benchmark requiring that at least 80 percent of each premium dollar go toward medical services. The benchmark was established to control the amount used by the companies to pay for overhead and bonuses.

Insurers are required by the federal health overhaul law to limit profits, salaries, and other administrative costs to no more than 20 percent of premiums. Those that do not must rebate their customers either with a check in the mail, a reimbursement to their credit or debit card, or premium reduction.

The federal agency said companies owing rebates are: American Republic Insurance Co., Cigna HealthCare of North Carolina Inc., Golden Rule Insurance Co., Guardian Life Insurance Company of America, John Alden Life Insurance Co., Mid-West National Life Insurance Company of Tennessee, National Foundation Life Insurance Co., Time Insurance Co., UnitedHealthcare Insurance Co., and WellPath Select Inc.

This is the first time North Carolina residents will receive the "medical-loss ratio" rebates.

Federal regulators last year allowed North Carolina insurers a one-year delay in meeting the benchmark because the state's insurance market was highly concentrated with just nine insurers that needed some leeway to keep from driving some out of the state. Blue Cross Blue Shield of North Carolina had more than 80 percent of the market for coverage sold to individuals and small businesses, the federal agency said last year.

Blue Cross customers are not eligible for rebates on their 2012 premiums because it said it exceeded the 80 percent standard.