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Health insurers participating in the FEHB program are required to issue any MLR rebate to the policy holder. OPM is the policy holder for all FEHB plans, therefore we will receive the rebates from plans that exceed MLR limits. OPM will deposit any MLR rebates into the contingency reserve of the health plan offered by the insurer that paid the rebate, and use it to directly reduce premiums for future years. This ensures any rebates will be shared between health plan enrollees and the Federal agencies that pay for FEHB coverage. OPM policy and regulations for handling the return of overpayments by FEHB plans are guided by the Federal Acquisition Regulation Section 31.201-5 entitled “Credits” which states, “The applicable portion of any income, rebate, allowance, or other credit relating to any allowable cost and received by or accruing to the contractor shall be credited to the Government either as a cost reduction or by cash refund.”
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