Due to COVID-19, some carriers are experiencing a reduction in benefit plan utilization and offering their employer-clients a refund or credit towards future premium payments. A few TPAs are providing a similar offset for administrative fees.
If the refund is considered an ERISA plan asset, then ERISA’s general fiduciary standards must be followed. Guidance on the ERISA standards were provided in regard to Medical Loss Ratio Rebates established under the Affordable Care Act. Often, the refund or credit can be applied towards a premium holiday for plan participants. Please see bulletin below to guide you through the steps to determine how to use your refund or credit. As always, make sure you consult your legal or accounting advisors as to the best way to handle this unique situation.
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