My Insurance Rebate Disappears Into Black Hole. Anthem Tells Me To Complain To Someone Who Cares

You may be one of the millions of Americans who, as part of the Affordable Care Act, should be receiving a rebate from your health insurance provider, usually distributed to your employer. But what if you’re also one of the millions of Americans whose employer is no longer in business?

This is the problem currently faced by Consumerist reader Todd, who recently received a letter from Anthem BCBS that, because the insurer didn’t spend at least 80% of customers’ premiums on medical care, he would be getting the rebate.

“That’s great,” Todd writes to Consumerist. “The letter says that the rebate will be sent to my employer who can then apply it to future premiums or provide a cash rebate. Also great. Only problem is that the employer that I had this particular insurance with laid off all of its employees and is in bankruptcy. As far as I know the only person still attached to the company is the owner in Japan, so I am kind of stuck.”

Todd says he contacted Anthem to explain my situation but didn’t exactly find a sympathetic ear.

“The representative said that their responsibility ends with sending me a letter, sending a check to the address on file for my employer and they are not required to do any more than that,” he writes. “They suggested I contact the Better Business Bureau or a ‘legal expert.’ I don’t know what the BBB would be able to do with a company that doesn’t exist anymore, and I really don’t want to pay a lawyer for what will probably end up being a $50 rebate.”

Figuring Todd couldn’t be the only one stuck in this sort of situation, we reached out to the Dept. of Labor to see what someone should do if they are entitled to a rebate but can’t get it because their former employer has vanished into history.

A rep for the agency explains:

Employees who suspect they are not benefiting from a rebate provided to their company, or who have questions about the rebate program, can contact the U.S. Department of Labor’s Employee Benefits Security Administration at or 1-866-444-3272. A Benefit Advisor may refer a complaint to enforcement staff for investigation and possible further action. In those cases, we will work with all parties involved to reach a resolution that works for businesses and ensures consumers get the benefits they deserve.

Meanwhile, the folks at Labor tell Consumerist they will put Todd in touch with a Benefits Advisor who can assist him with his issue, meaning he hopefully won’t need to go get a “legal expert” or complain to the BBB about a business that is no longer in business.


Edit Your Comment

  1. Cor Aquilonis says:

    He might want to find the bankruptcy trustee and have a discussion with him/her. It might be more direct.

    • Lyn Torden says:

      This is actually the correct advice. If necessary, each employee needs to petition the bankruptcy court to be entered as creditors. And then under this new law, they are supposed to be first in line to get the rebate distributed by the trustee. The petition process is the way to make sure the trustee is required to handle it.

  2. scoosdad says:

    Rebate? What is this rebate of which you speak?

    I recently got the letter from my health insurance provider (one of the top three in the nation) basically saying, “Sorry, we spent it all, you’re not getting a rebate” {followed by the sound of a raspberry being blown in my direction}.

    • AcctbyDay says:

      This is not a problem. They are supposed to spend our premium dollars on healthcare costs.

      • Evil_Otto would rather pay taxes than make someone else rich says:

        But they don’t, that’s kind of the point of this rebate program. Under the new law, if they don’t spend 80 cents on the dollar on actual healthcare, they need to pay rebates. If they can’t figure out a way to run their business at 80% efficiency, tough shit.

        • HeadsOnPikes says:

          That’s wrong for multiple reasons. If an insurance company pays 80 cents out of every dollar it takes in on direct medical care costs, it’s not the case that they are running at 20% efficiency. First, nobody disputes that there are actual administrative costs. Legitimate questions can be raised as to whether those costs could be lowered through more efficient management, but there will always be administrative costs, overhead, etc. The insurance company’s profits are also in that 20%. Thus, it’s simply not the case that spending 80% on medical costs means that the other 20% are just inefficiencies.

          • HeadsOnPikes says:

            *it’s not the case that they are running at 80% efficiency.

            My kingdom for an edit button.

            • Bunnies Attack! says:

              I’m not sure what your point is… the idea of the 80% threshold is to try and dissuade the insurance company from simply rejecting EVERY claim to get as much profit as possible. Previously, there was no penalty to simply rejecting every claim or making customers jump through hoops to get a claim approved but the idea is that with this disincentive, they can still control costs to maximize profit, but not at the expense of paying for health care.

          • bigroblee says:

            I think the entire situation of healthcare in this country would be solved if healthcare companies were required to be run as non profit organizations.

  3. wade says:

    This is one of those things that we couldn’t find out about until we passed the bill.

  4. Blueskylaw says:

    In other news, many companies across this great nation are now reporting
    increased profits this quarter due to passage of the Affordable Care Act.

    • TheMansfieldMauler says:

      This was just taking profit from one company and giving it to another. It’s a wash.

  5. Laura Northrup says:

    Ah, yes, the Better-No-Longer-in-Business Bureau.

  6. TuxthePenguin says:

    Or maybe your employer is not going to send you the rebate because they paid for part of your plan and want that money to offset the cost of your benefit.

  7. wwwandererer says:

    yes all that work for a $1.80 USD check @ least that’s what mine was.

  8. DaveInBillsburg says:

    I loved the wording of the law, it states that for company provided benefits, the company would be getting the rebate from the insurance company and would decide how to pay it out “that would be of best value to the employees” – wonder how many companies are hoping that people won’t understand this and will use it to offset the company’s contribution?

    • Evil_Otto would rather pay taxes than make someone else rich says:

      Gee, employer screws over employee to increase profits. In other news, the sky is blue, and water is wet.

      • TheMansfieldMauler says:

        Not giving the employee money the company saves does not equal screwing over the employee. All it means is that the company’s expenses were a little less.

        A company that provides health insurance is not obligated to pay out X amount and if it’s cheaper rebate the rest to the employee. The employee isn’t out anything if he doesn’t receive the rebate because it wasn’t money he was going to get anyway.

  9. PragmaticGuy says:

    I would think that the rebate becomes part of the assets in the employer’s bankruptcy and the employees now become one of the unsecured creditors which means they ain’t gettin’ shit. This is especially true if the employer paid any of the premiums toward said health insurance.

  10. Applekid says:

    Is anyone surprised that Anthem BCBS is telling him to suck an egg?

  11. Not Given says:

    It may be part of the bankruptcy estate, even if the company owes the rebate to the employee, the employee may have to get in line with the other unsecured creditors. If he doesn’t make the claim with the court, he isn’t included.

  12. and_another_thing says:

    After my own experience with an employer that dried up and blew away, I have little faith in the USDOL. In my case, the employer kept my 401(k) withholding for the last few pay periods, never sent it to the plan provider and then dragged his feet for months before the USDOL got him to release the funds already in the plan so I could move them to an IRA.

    I also never received my final pay.

    He should have faced prosecution but got off scot-free.

  13. ThinkingBrian says:

    Real question: Can the OP file a complaint with the BBB on Anthem BCBS (for not giving him his rebate) since his former employer no longer exists? Other than that and of course complaining online, the U.S. Department of Labor is the only option. Most people are not going to hire a lawyer for this.

    • benminer says:

      It’s not Anthem’s obligation to directly refund the OP. That is not their duty under the law and it was never intended to be. The administrative burden on insurance companies would be huge and probably eat up the 20% that was saved which generated a refund in the first place. For one thing, insurance companies don’t have all the information neccessary to calculate the refund on an employee level to begin with, and secondly they don’t make the decision on how the refund is to be spent.

    • StarKillerX says:

      They aren’t required to provide him the rebate, they are required to send it to the company, which they did. The fact that it might suck for the OP doesn’t change the law so the way I see it Anthem is in the clear on this one.

  14. Jawaka says:

    More sensationalism. Anthem may not have been able to resolve the problem for the OP but they also certainly didn’t tell him to complain to someone who cares.

  15. who? says:

    Anthem is doing exactly what they’re required by law to do. Rebate the money back to the employer that originally paid the claim. The employer just happens to be in liquidation at the moment.

    Most of the rebate would go back to the company anyway, since they paid most of the premium in the first place. Of the small amount that’s left, Todd will need to file a claim with the bankruptcy court. He’s right. It’s probably a $50 rebate, but he’s probably only entitled to $5 of it. After things are parceled out in the bankruptcy court, he might get $0.50.

    I’d say this isn’t worth worrying about. If the company were still in business, he probably would never have seen any of the money anyway.

  16. yankinwaoz says:

    Doesn’t the rebate belong to the creditors of the BK company? It is then up to the trustee to determine what happens to that money.

  17. MarkFL says:

    What if the company is still in business but I no longer work there? I was in the insurance plan for just over five years.

    • Baka-no-Kami says:

      Then your former employer still paid most of the insurance premium and is the only on legally entitled to received the refund. A case can be made that some small portion of it (assuming they even got one) belongs to you, but it wouldn’t be worth the effort.

      • MarkFL says:

        But that would be true even if I still worked there. But this brings up another question, although it doesn’t apply to me: What if a former employee had COBRA? Then they would be bearing all of the insurance premiums.

  18. Difdi says:

    Even if the company were still around, the Better Business Bureau wouldn’t be able to do a single thing to help.

    The BBB is a trade organization, and membership is on a purely voluntary basis. Enforcement powers amount to giving a member a bad rating, and that’s all that can be done. If the member doesn’t care about ratings, so what?