Recently, the Arizona Department of Insurance (the “DOI”) became aware of the use of rebates or credits, offered to employers under a variety of names. These various credits functioned as a health insurance premium rebate from the insurer to the employer.
To be lawful, rebates (or credits) must appear in writing within the contract. Companies must also apply rebates and credits fairly. Arizona law does not allow insurers to offer different premiums, policy fees, rates, policy benefits, or other terms or conditions of the contract to individuals of the same class and hazard. If the policy includes the rebate, but the insurer does not offer the rebate to all employer groups of the same class and hazard equally, then the rebate violates Arizona law.
The Bulletin does not affect credits for bona fide wellness programs that meet the requirements of A.R.S. §20-450.
Arizona law also prohibits life and disability producers from offering, allowing, giving, or paying an unlawful rebate. The DOI can penalize producers who offer rebates or credits that are not written into the contract and applied fairly. The penalties for a producer include a cease and desist order from the DOI, a fine, or their license could be suspended or revoked.
For questions contact your UnitedHealthcare representative.