Questions answered on insurance rebate Blue Cross Blue Shield issuing rebates

Q: Who will get rebates?

A: Individual customers will receive checks directly from Blue Cross Blue Shield, while owners of businesses with between two and 50 full- and part-time employees, including seasonal help, will get one check for the company’s policy.

Q: What can the rebates be spent on?

A: Individual customers can use their check as they please, while small business owners have several options. They can return a portion of the rebate to employees, reinvest the money to offset future health care costs or use it in another way that benefits employees.

Q: Why are the rebates coming?

A: Blue Cross Blue Shield and many other providers are required to issue rebates because they did not meet a target for spending on customers’ medical claims in 2011.

At issue are requirements known as medical loss ratios.

Last year’s medical loss ratio target for individual and small group markets was 80 percent, meaning an insurer had to use 80 cents out of every dollar submitted in premiums for customers’ medical claims and for other specific activities.

Blue Cross Blue Shield spent 74.8 percent of premiums on claims in the individual market, and 79.9 percent on claims on the small group market.

Company spokeswoman Patti Embry-Tautenhan declined to say how much it will pay out in rebates.

Blue Cross Blue Shield won’t issue checks for large group plans.

The target for that market was 85 percent, which Blue Cross Blue Shield exceeded by spending more than 88 percent on claims.