DOL Issues Guidance to Employers on Use of MLR Rebates


On Friday the DOL issued Technical Release No. 2011-04 providing guidance to employers who receive rebates from their health insurance carriers due to the carriers’ failure to meet required medical loss ratios under the Affordable Care Act.  According to the DOL’s guidance, rebates received by an employer may be plan assets which must be used for the exclusive benefit of plan participants.  Employers should review the terms of their insurance policies and governing plan documents, as well as their contribution percentages,  to determine whether all or a portion of any rebates received will be considered plan assets.   In addition to being used for the exclusive benefit of plan participants, plan assets must also be held in trust.    In Friday’s guidance the DOL extended the trust exemption for cafeteria plans and certain other contributory welfare plans to rebates received by employers who rely on this trust exemption to the extent the rebates are used within three months of receipt.   The DOL guidance can be accessed at



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: