BlueCross Issues Rebates for 2019 Plans to Individuals, Small Group Employers

Health plan met standard for medical spending on large employer plans, retained only 2% net income across all lines of business

CHATTANOOGA, Tenn. — BlueCross BlueShield of Tennessee will issue more than $88 million in rebate checks by the end of September to individual/Marketplace members and small employer groups who held medical coverage with the company during 2019.

This year’s rebates include:

  • $82 million for individual/Marketplace members (those who bought their own coverage, either directly or through, and
  • $6 million for small businesses (employers with 50 or fewer employees).

BlueCross owes the rebates based on guidelines in the Affordable Care Act (ACA) that govern the share of plan premiums that must go to pay for medical services.

Each year, BlueCross sets rates based on anticipated costs for members’ care and works hard to keep operating expenses low.

“As a not-for-profit health plan, we focus on supporting the health of the people we serve by advocating for affordable, high quality care and using our members’ premiums responsibly,” said Kelly Paulk, vice president of product strategy and individual markets. “Every year, most of our members’ premiums are paid out for medical treatments or enhancements that improve their care experience.”

In addition to claims and quality improvement initiatives, premiums fund operating costs for customer service, digital health tools for members, and efforts to prevent fraud. After paying local, state, and federal taxes, BlueCross keeps a portion as net income, which goes into reserves to protect the stability members rely on, especially in situations like the COVID-19 pandemic. In 2019, across the entire business, the net income posted was two cents of every premium dollar.

The Affordable Care Act requires that medical plans covering individual and small group members spend at least 80 percent of collected premiums on claims and activities to improve health care quality — a percentage known as the Medical Loss Ratio (MLR). The MLR is based on a three-year rolling average.

BlueCross spent a smaller-than-expected percentage of premiums on these needs for the 2019 reporting period by 10.8% for individual policyholders and for small group employer plans by 1%. The company earned $45 million on the individual/Marketplace line of business in 2019 after lowering rates by an average of 14.8%.

The company surpassed the minimum MLR of 85% for large group accounts, so it will not issue rebates to that business segment.


Type of Policy BlueCross Actual 2019 MLR    Required MLR
Individual policy holders 69.2% 80%
Small groups (up to 50 employees)   79% 80%
Large groups (51+ employees) 87% 85%


Rebates, which average $890 per member for the individual/Marketplace customers and $540 per small business, will be based on adjusted premiums for 2019 medical coverage – not the amount of premium each policyholder paid. (This means the company subtracts state, federal and other taxes from the total.) The rebate does not cover premiums for other coverage such as dental or vision.

“These rebates will affect approximately 92,000 BlueCross customers who purchase health insurance through the Affordable Care Act Marketplace,” said Rachel Jrade-Rice, assistant commissioner for the Tennessee Department of Commerce and Insurance. “This rebate system is working as intended — to ensure consumers get the most value for their premium dollars.”

“The rebate checks will be delivered directly to the policyholder’s address. While these checks are valid and should be deposited, please be on the lookout for fraudsters who might want to use this as an opportunity to scam you or your loved ones,” Jrade-Rice said. “If you have questions about your rebate check, please contact your health insurance carrier directly. Tennesseans can also contact the Department of Commerce & Insurance with questions at 615-741-2218 or 1-800-342-4029.”

The rebate checks will be mailed to qualifying policyholders by Sept. 30. For more information, visit

About BlueCross®

BlueCross BlueShield of Tennessee is a taxpaying, not-for-profit health plan serving more than 3.5 million members in Tennessee and around the country. The Chattanooga-based company was founded in 1945 and is celebrating its 75th anniversary of bringing peace of mind to its members and local communities. BlueCross BlueShield of Tennessee Inc. is an independent licensee of the BlueCross BlueShield Association. For more information, visit the company’s news center at

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