About 25,000 Montana residents are expected to receive a rebate from insurance companies averaging $194 by Aug. 1 due to the health reform law, according to the U.S. Health and Human Services Department.

The rebates result from a provision in the Patient Protection and Affordable Care Act, nicknamed Obamacare, which requires health insurance companies to spend at least 80 percent of consumers’ premiums on medical care and quality improvement.

According to the agency, the remaining 20 percent can be spent by insurance companies on administrative costs. Insurance companies that don’t meet the 80/20 standard, the medical-loss ratio rule, must provide rebates.

“This is cold hard cash in the hands of working Montanans, and it’s just the tip of the iceberg,” Sen. Max Baucus said. “Thousands of Montana grandparents, young people and families are already benefiting from the cost-savings and consumer protections in this law.”

Baucus is considered one of the primary architects of Obamacare. The U.S. Supreme Court upheld most of the health care overhaul legislation in a 5-4 decision on June 30.

Across the U.S., about 12.8 million Americans will receive about $1.1 billion in rebates this summer, an average of $151 per household.

Rebates could come as a check in the mail, a lump-sum reimbursement to an account used to pay insurance premiums by credit or debit card, or a reduction in future premiums. Employers may also offer one of those or apply the rebate in a way that benefits employees.