Health insurers owe $332 million in refunds to consumers and employers for collecting excessive premiums last year, the Obama administration announced on Thursday. Under the Affordable Care Act, insurance companies must spend 80¢ of each premium dollar on medical care, leaving 20¢ to go toward administrative costs and profits. For policies sold to large employers, they have to spend 85 percent of premiums on care.
All told, 6.8 million consumers are entitled to refunds for 2013 premiums, with an average refund of $80 per family. Insurers must notify people about refunds by Aug. 1 and explain whether they’ll send a check, a refund to the credit or debit card used to buy the policy, or a credit consumers can use to offset future premiums. When employers get the refunds, they can provide a cash refund to workers or use it to benefit current subscribers in other ways.