As you may have already heard, the Massachusetts Division of Insurance has rejected nearly all of the proposed rate increases proposed by Blue Cross, Tufts, Harvard Pilgrim, Fallon and other small business health insurers.  In all, 234 of 275 proposed rates changes were rejected. Unfortunately, this action took place after the rates had already been released to the public and employers made decisions about their plans based on the now-rejected rates. This means that, as of this moment, the rates that were effective with April 1st renewals are invalid and the insurers must propose new, lower rates.

However, the insurance companies are not accepting this rate rejection easily and vow to fight to have the rate increases upheld.  If the rejection is upheld and the insurers are forced (or elect) to issue revised rates, no one is clear how refunds will be handled. Also unclear is the mechanism that will be used to deal with those groups that changed plans or even insurance carriers because their rate increase was too expensive.

At this time, we cannot tell you how this situation will end, but we will continue to monitor the situation and keep you updated, both here and on our Facebook page.

Read more in a well-written story on the New York Times website