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For those employers who choose to adopt such changes, the new rules provide more flexibility for individuals in either of two scenarios: (i) those changing from employer-sponsored group health coverage to other minimum essential coverage (MEC) options due to a reduction in hours; or (ii) those changing from employer-sponsored group health coverage to a qualified health plan (QHP) during a special enrollment period or annual open enrollment period through a public Marketplace (Exchange).

For the third year, employers who sponsor an insured group health plan may be receiving a Medical Loss Ratio (MLR) rebate from their insurers. Self-funded medical benefit plans are not subject to these requirements. The rebates raise several fundamental questions for employers including:

• How much (if any) of the rebate must be distributed to plan participants?
• How quickly must I distribute the participants’ share?
• What options do I have in distributing the employees’ share?
• What are the tax consequences of the various distribution options that are available?