Can we spend our MLR Rebate on Office Chairs?

Discussion in 'Legal and HR' started by CrzyGK, Oct 16, 2016.

  1. CrzyGK

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    New Member

    Oct 16, 2016
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    We recently got our MLR Rebate and we are wanting to know if it's OK to spend the money on office chairs for everyone. This is what the government says regarding this:

    1. to return the rebate to the participant as a cash payment,
    2. to apply the rebate as a reduction of future participant contributions (a so-called, “premium holiday”)
    3. to apply the rebate toward the cost of benefit enhancements.
    Is this a legitimate use of the rebate for the benefit of the employees? If not, what's the worst that could happen if we went ahead and used it for the chairs.

  2. Joseph.Shivell

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    Oct 8, 2009
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    According to Cigna, it depends on what is called a plan asset. If the rebate is a plan asset, it cannot be used for corporate expenses. If the employees paid the entire cost of insurance, then the MLR rebate is a plan asset. If the employer paid the entire cost of insurance, it is not. If payment is split between employer and employee, the percentage paid by the employer is not, but the percentage paid by the employee is. More information can be found in the "Frequently Asked Questions About Medical Loss Ratio (MLR)" on the Cigna website

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