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There’s a rare bit of good news for people who buy their own health insurance: Your health insurer may owe you money.

Thanks to a rule put in place with the passage of the Affordable Care Act, insurers must spend at least 80 percent of the premiums they collect each year to pay for medical claims or initiatives such as wellness programs that improve quality of care for people who buy their own health insurance.

If your insurer spends less than that amount, it owes you a refund. And for 2018, insurers owe a record $743 million—four times what they paid in 2017—to 2.7 million individual policyholders. That's nearly a third of people who had ACA plans in 2018.  

The record amount is driven in large part by insurers imposing steep premium increases in 2018 to cover uncertainty about their costs and the future of the ACA, says Cynthia Cox, a vice president at the Kaiser Family Foundation, who analyzed insurer filings on the rebates. That’s because Republicans in Congress tried but ultimately failed to repeal or replace the health insurance law. “Insurers were pretty nervous about setting premiums without knowing the rules of the game, so they priced cautiously, which meant pricing high,” Cox says.

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Insurers must begin issuing the rebates by Sept. 30. And the refunds can be substantial: An average of $270 for an individual, and up to $2,000. How much you get depends in part on your insurer and where you live.

Although the record $743 million is significant, the KFF analysis uncovered an even more startling fact: Millions of dollars in refunds go unclaimed every year. Individual policyholders have failed to collect nearly $38 million in refunds since 2012, according to Cox and KFF researcher Rachel Fehr.

Cox says that few people realize they may be due a refund, so they don't know to look for a check from their insurer. Some might even throw it out, assuming it's junk mail. And she points out that people who purchase their own insurance may need it only for a short time because they are in college or between jobs, and may be more likely to move or lose track of the checks.

Refunds Vary by State and Insurer

Insurers will pay the most per policyholder in Pennsylvania ($990), Virginia ($770), and Minnesota ($670).

Overall, insurers will pay out the most in Virginia ($111.3 million), Arizona ($92.3 million), and Texas ($80.4 million), according to the KFF analysis. Virginia ranks so high largely because one insurer, Sentara (also known as Optima), had the highest individual premiums in the country in 2018. Other insurers issuing large rebates include Centene (at least $216.9 million), HCSC ($78.5 million), Cigna ($55.9 million), and Highmark ($50.8 million).

You could be due a refund even if you received a subsidy from your insurer to cover some of your premium costs. But some insurers don't owe rebates at all. Not receiving a rebate doesn't mean you're missing out though. It just means you weren't overcharged in the first place.

Note that people who get insurance through an employer or another group plan are also entitled to rebates if their insurer doesn’t spend at least 80 to 85 percent of the premiums on claims. But that is less likely to happen in group plans in part because they didn't face the same uncertainty as ACA plans and therefore had more appropriately priced premiums. And when rebates are due, they are typically split between the employer and employee, so the refund amount is relatively small.

How to Get Your Refund

If you bought your own health insurance in 2018, the odds are pretty good that you are due a refund. And it's also worth checking to see whether you’re owed money from the past. Here's how to do it.

Watch your mail. Insurers must start issuing refunds for 2018 by Sept. 30 of this year, so be alert to any mail you get from your insurer. Your refund could come in one lump sum or in the form of a credit toward future premiums if you're still a policyholder.  Insurers are required to make a good faith effort to find you if you're owed a rebate or haven't cashed a check. So be aware that your insurer may also try to contact you by phone or email about refunds you're due. 

Call your insurer. If your insurer hasn't contacted you or you think you missed the notification, call the company directly to see whether you are due a refund. Be prepared to provide details about your plan.

Contact the state. If an insurer can't find you or you haven't cashed a check, eventually it must turn the money over to the state as abandoned property. How long that takes depends on state regulations but can be from one to five years. You can check at MissingMoney.com, a national database endorsed by the National Association of Unclaimed Property Administrators. About 40 states participate in the database, but MissingMoney also provides links to each state's abandoned property search site. If you have moved, you’ll need to check the state where you lived when you had the policy.