Health insurance rebates coming in Minn. -- mostly to employers - FOX 35 News Orlando

Soon, thousands of Minnesotans will get a letter from their health insurance providers about refunding some of the money paid in last year due to the new health care law -- but where that money will go is a little complex.

The 80/20 plan requires any insurer that spent less than 80 percent of revenues on actual health care an d more than 20 percent on administrative costs like executive pay will need to issue a rebate for the difference -- and that means companies are shelling out more than $1 billion.

That rule was pushed by Sen. Al Franken, who says Minnesota's HMO non-profits should be a model for the nation.

More than 123,172 residents in this state will be getting letters about the rebates; however, most of that money won't go to individuals. It goes right to the boss, so that employers can offset future premiums.

Smaller businesses, like Chris & Rob's Chicago Hot Dogs, may not be relishing the Affordable Care Act. Owner Rob Bubnecay got a letter on Tuesday too, but it wasn't a rebate. Instead, it was a notice that his rates are going up 7 percent in anticipation of the industry changes.

"I thought I would qualify for the Obama small business plan and offer it to employees," he said. "In order to do that, I'd have to cut my manager's salary by a third."

Bubnecay said his employees would need to be below the poverty level to qualify for the small business insurance plan.

So, some get rate hikes while others get rebates -- but even those who do get rebates may not see a dime if their employers get to keep it.

The rebate in Minnesota is about $160 per household, which is about average since most insurers in the state already come close to the 80/20 split. Vermont will see highest rebate at $807 per family, followed by Alaska and Alabama.