Health insurance rebates adjusted to $57 million

By Chelsea Conaboy, Globe Staff

Insurers in Massachusetts will return $57 million to individuals and small businesses because they spent too much of the money collected as premiums on administrative costs or surpluses. That’s about $10 million more than was expected based on filings the insurers made to the state earlier this month.

Barbara Anthony, undersecretary of Consumer Affairs and Business Regulation, said some insurers miscalculated what they owed. “That’s why the Division of Insurance is charged with reviewing these files,” she said.

This is the first year that rebates will be issued under a 2010 law requiring insurers to use at least 88 percent of premiums paid in 2011 for medical care. That figure goes up to 90 percent for 2012. The law expires at the end of the year, though lawmakers are considering extending it.

According to figures provided by Anthony’s office, Fallon Community Health Plan will pay $8.5 million, Harvard Pilgrim Health Care will pay about $12.5 million, Neighborhood Health Plan will pay $3.3 million, and Tufts Health Plan will pay $32.6 million.

Those with individual plans will receive credit or a check in the mail, for an average rebate of $205, according to a state press release, the average rebate for individual plans is $205. Small group plans, on average, will receive $936. Those rebates will be distributed to employers.