Some employers are receiving health insurance rebates. If you are one of those lucky employers you are required to act quickly.
Generally you have three months to pass the employees’ share back to the employee.
If you are wondering why you received the rebate, it is because the health reform law requires insurers that don’t spend enough of the premiums on medical care and quality improvement to rebate part of the premiums.
The rebates started going out in July. We are seeing some employers generating goodwill by giving the full amount to employees through premium reductions or cash payouts, even though businesses can generally keep the portion of rebates attributable to employer contributions.
A word of caution, there are complicted rules on the potential taxability of the rebates.
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