Medical and Dental Premium Credit for COVID-19 should be treated in the same manner as MLR Rebates (COVID-19)
Posted on June 17, 2020
As per our legal team, premium credits provided by the carriers due to COVID-19, must be treated in the same fashion as a MLR Rebate.This means the medical and dental premium credit in response to COVID-19 MUST be shared with participating employees in the same manner in which the employer shares the cost of the contributions.
For example last week Oxford/UHC announced that they are issuing a medical and dental premium credit for fully insured small and large groups in New York, New Jersey, and Connecticut. As per our legal team, this premium credit must be treated in the same fashion as a MLR Rebate. The Oxford/UHC medical and dental premium credit amount will be reflected on the July invoice as a line item and amounts will be as follows:
- Roughly 15% of their May 2020 medical invoice for New York and New Jersey groups
- Roughly 10% of their May 2020 medical invoice for Connecticut groups
- Roughly 50% of their May 2020 dental invoice for New York, New Jersey, and Connecticut groups
Below outlines 3 ways the premium credit can be distributed to employees:
- Returned to employees in the same % that it was collected via payroll deduction (must be allocated within 3 months of receiving the credit). For example;
- if ER pays 100% of the premium they retain 100% of the credit
- if ER pays 50% of the premium they retain 50% of the credit and split up the other
- Used for benefit enhancements like wellness
- Used to offset future premiums (must be within 3 months of receiving the premium credit)
