Can we spend our MLR Rebate on Office Chairs?

[CrzyGK]

What is the name of your state (only U.S. law)? Missouri

We recently got our MLR Rebate and we are wanting to know if it's OK to spend the money on office chairs for everyone. This is what the government says regarding this:

to return the rebate to the participant as a cash payment,
to apply the rebate as a reduction of future participant contributions (a so-called, “premium holiday”)
to apply the rebate toward the cost of benefit enhancements.

Is this a legitimate use of the rebate for the benefit of the employees? If not, what's the worst that could happen if we went ahead and used it for the chairs.

Thanks!

 

[FlyingRon]

I would not believe chairs would qualify (even if it improved your employees health).

A benefit enhancement covers items or services not previously covered by the insurance policy that generated by the rebate. Wellness plans, additional dental or vision coverage.

Even better ideas like buying exercise equipment generally gets the thumbs down because it's not related directly to the health plan and other reasons.

 

[CrzyGK]

I would not believe chairs would qualify (even if it improved your employees health).

A benefit enhancement covers items or services not previously covered by the insurance policy that generated by the rebate. Wellness plans, additional dental or vision coverage.

Even better ideas like buying exercise equipment generally gets the thumbs down because it's not related directly to the health plan and other reasons.

Could we get in trouble if our CTO had already bought the chairs? Or is this more of a "guideline" thing that doesn't really have legal consequences if not followed exactly?

 

[justalayman]

What is the name of your state (only U.S. law)? Missouri

We recently got our MLR Rebate and we are wanting to know if it's OK to spend the money on office chairs for everyone. This is what the government says regarding this:

to return the rebate to the participant as a cash payment,
to apply the rebate as a reduction of future participant contributions (a so-called, “premium holiday&#8221
to apply the rebate toward the cost of benefit enhancements.

Is this a legitimate use of the rebate for the benefit of the employees? If not, what's the worst that could happen if we went ahead and used it for the chairs.

Thanks!

Was the insurance 100% company paid? If not, the share owed to the enrollee belongs to them.

How can you conclude buying new chairs (which actually benefits the company anyway since they would be a business asset) comes anywhere close to fulfilling one of the limited means of applying the rebate to insurance costs of the enrollee?

You have three choices:
Pay it to the enrollee
Apply it to enrollee obligations
Use it to provide increased insurance benefits.

Nowhere does it say take the employees money and buy business assets. It is the enrollee's money, not yours (unless the insurance is 100% funded by the employer).


I suspect the penalty involved would be the same as if you took money from your insurance plan and used it to purchase company assets since that is exactly what you would be doing.

 

[FlyingRon]

Well, he could pay for the chairs and still use the MLR for something legitimate and not be in trouble.

By the way, providing proper workstations (chairs, etc...) isn't a "benefit" to the employee, it's an obligation of the employer.

 

[LdiJ]

Well, he could pay for the chairs and still use the MLR for something legitimate and not be in trouble.

By the way, providing proper workstations (chairs, etc...) isn't a "benefit" to the employee, it's an obligation of the employer.

This is purely a personal opinion and not a legal one at all, but a really good chair, vs a typical chair can make a huge difference in both employee health and moral.

IF the employer was going for the REALLY good chairs I can kind of understand why they might have thought it was a valid use of an MLR rebate. That doesn't mean that I think it was, but just that I can understand.

 

[FlyingRon]

This is purely a personal opinion and not a legal one at all, but a really good chair, vs a typical chair can make a huge difference in both employee health and moral.

If it makes a difference in health, they ought not to be making the employees pay for it.
If it makes a difference in morale alone, it's not a valid MLR expense at all.