Key takeaways:

• Employers that fully insure their employee health care benefits may have received or may soon receive a “medical loss ratio” rebate from their insurance provider. The rebates must be sent by August 1, 2012.
• Some or all of the rebate may be “plan assets” subject to the Employee Retirement Income Security Act of 1974 (ERISA). To the extent the rebate is a “plan asset,” the employer or plan administrator has fiduciary responsibilities regarding the use of the rebates, which must be used for the benefit of the employees covered by the policy.
• This Client Update provides guidance on an employer’s and plan administrator’s ERISA fiduciary responsibilities regarding the rebates.