More than 8 million people are in line for health insurance discounts this month. Are you one of them?

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Is good money coming your way?

Main points

• Insurance companies are expected to pay $1 billion in premiums by the end of September.
• The average person receiving a discount can expect a payday of $78 to $155.
• Consider using that money toward an emergency savings account, a health savings account, or paying down debt.

Health insurance companies are required to follow certain rules. One such rule is sticking to the medical loss ratio, which requires you to spend at least 80% of the money you collect in premiums on healthcare costs and patient health-related costs.

Insurers who don’t meet that limit can’t just keep the extra money. Instead, they are forced to pay policyholders in the form of discounts.

This is what is happening this year. Health insurance companies are expected to pay $1 billion in premiums by the end of September. Kaiser Family Foundation.

The average person on a Marketplace plan can expect a $141 discount. Meanwhile, participants in large group plans can expect an average of $78, and participants in small group plans can expect $155.

If you’re getting a deductible from your health insurance company this month, you may want to double that amount. But here are some options to consider instead.

1. Increase your emergency fund

Do you have enough money in you? Savings account deposit To cover at least three months of full living expenses? If not, any extra money coming your way should go directly into the bank. You never know when you might lose your job or be hit with an unexpected bill. If yours Emergency fund It takes work, it pays to deposit your discount check in the bank and get closer to your savings goal.

2. Remove the chip on some debt

If you owe $3,000 on you Credit cards And get a $141 check from your health insurer, you can expect to use that money. Pay your debts. It doesn’t make a big difference. But really, it will. Any amount you can pay down on your debt will save you some extra interest. And so even if you’re looking at a balance that’s hard to pay off, it’s worth using your discount for that purpose.

3. Fund for health savings account

If you enroll in a health insurance plan with a high annual deductible, you may be eligible to participate. Health savings account, or HSA. An HSA allows you to set aside funds for immediate and long-term medical expenses in a tax-deductible manner. Not only do you get tax breaks on the money you put in, but you can invest it to grow into a bigger sum if you don’t need it right away. This is money you can use in the future if you have a costly health care issue.

Use that money wisely

It is a good thing that health insurance companies are held accountable for not paying participants. If yours The emergency fund is complete, you don’t owe a cent on your credit cards and you have money already set aside for health care expenses, then you can use your discount to get something fun. Otherwise, think of ways to use the money to improve your overall financial situation.