Health Care Reform Website

Medical Loss Ratio

Under the Affordable Care Act (ACA), health insurance issuers are required to submit an annual Medical Loss Ratio (MLR) report to the Department of Health and Human Services (HHS). Issuers spending less than 80% (for individual or small group plans) or 85% (for large group plans) of the premium dollars they receive on medical claims, clinical services and quality improvement initiatives must issue rebates for the difference to policyholders. Self-insured plans are not subject to the MLR requirements.

For the 2011-2013 reporting years, the MLR rebate was required to be paid no later than August 1 of the following year. Starting in 2015 (for the 2014 reporting year), the MLR rebate must be paid no later than September 30. Plan sponsors and participants who are eligible for a rebate will receive written notification from the issuer on or before the date of payment.

Rebates may be paid directly to the plan sponsor as a lump sum payment or as a premium credit for the current year. The sponsor may retain its portion of the rebate and distribute the remaining portion to participants as cash or premium credit.

Additional information on the MLR rebates, including their treatment for government health plans and plans subject to ERISA, is available in the Briefings linked below.

Additional Information

Premium Rebates Fully-Insured ERISA Plans
     This Briefing offers clarification on how the Medical Loss Ratio (MLR) rebates, mandated by the Affordable Care Act, are to be handled under ERISA plans.


Premium Rebates Fully-Insured Government Plans
     This Briefing offers clarification on how the Medical Loss Ratio (MLR) rebates, mandated by the Affordable Care Act, are to be handled under Government plans.