After a long run of continually rising premiums, there may finally there may be some good news for small businesses and individuals who purchase their own health insurance. According to a new report from the Kaiser Family Foundation, businesses and individuals can expect to receive $1.3 billion in rebates this year. The reason behind the rebates? The Affordable Care Act is now holding insurance companies accountable for how their customer’s premiums can be spent. According to the act, insurance companies are required to spend at least 80% of premium expenses on patient care and quality improvement. Insurance companies are therefore limited to spending 20% of those premiums on administrative costs, sales commissions and profits. If insurance providers exceed that limit, they are required to issue rebates for the difference. The Kaiser Family Foundation study reported that eight insurance companies in Michigan will likely be forced to issue rebates, but the researchers did not name specific companies.
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