More than 8 million people are in line for health insurance reimbursement this month. Are you one of them?
A nice sum of money awaits you?
- Insurance companies are expected to pay out $1 billion in rebates by the end of September.
- The average person who gets a discount can expect a salary of $78 to $155.
- Consider using this money to fund your emergency account, health savings account, or pay off debt.
Mutuals are required to comply with certain rules. One of those rules is to stick to a medical loss rate that requires them to spend at least 80% of the money they collect on premiums for health costs and health-related expenses. patients.
Insurers who don’t meet this threshold can’t just keep the extra money. Instead, they are obligated to refund it to policyholders in the form of reimbursement.
This is what is happening this year. Health insurance companies are expected to pay out $1 billion in rebates by the end of September, according to a recent estimate from the Kaiser Family Foundation.
The average person on a market plan can expect a discount of $141. Meanwhile, large group plan participants can expect $78 on average, and small group plan participants can expect $155.
If you get a discount from your health insurance company this month, you might be inclined to spend that money. But here are some options to consider instead.
1. Boost your emergency fund
Do you have enough money in your savings account to cover at least three full months of living expenses? If not, any extra money that comes your way should go straight to the bank. You never know when you might lose your job or be hit with an unexpected bill. If your emergency fund needs work, it pays to stick your refund check in the bank and get closer to your savings goal.
2. Reduce your debts
If you owe $3,000 on your credit cards and receive a check from your health insurer for $141, you might assume that using that money to pay off your debt won’t make much of a difference. But in fact, it will. Any amount you are able to pay for your debt could save you additional interest. And so it’s worth using your discount for that purpose, even if you’re looking at a daunting balance to pay off.
3. Fund a health savings account
If you are enrolled in a health insurance plan with a high annual deductible, you may be eligible to participate in a Health Savings Account, or HSA. An HSA saves you money in a tax-efficient way for short-term and long-term medical expenses. Not only will you get tax relief on the money invested, but if you don’t need it right away, you can invest it to grow into a bigger sum. It’s money that you can use in the future if you have a very expensive health problem.
Make the most of that money
The fact that health insurance companies are held accountable for not overcharging attendees is a good thing. If your emergency fund is full, you don’t owe a penny on your credit cards, and you already have money set aside for health care costs, you might be inclined to use your reimbursement to provide yourself with something. fun thing. If not, think about how you can use this money to improve your overall financial situation.
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