Under the Affordable Care Act, insurers must spend a minimum percentage of the money they receive from health insurance premiums on medical care and quality improvement activities. This percentage is called a medical loss ratio (MLR). Insurers that offer health care coverage to individuals or small groups generally must meet an 80% MLR; for the large group market the MLR is 85%. States can require a higher MLR. An insurer that does not meet its MLR for the year is required to issue rebates to individuals enrolled in the plan. Rebates are based upon aggregated market data in each state and not upon a particular group health plan’s experience.

For more details about the MLR, click here. 

For information on how to calculate your MLR, click here. 

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