How Employers Should Handle MLR Rebates

The Affordable Care Act (ACA) requires health insurance issuers to spend a minimum percentage of their premium dollars on medical care and health care quality improvement. This percentage, or medical loss ratio (MLR), is:

  • 85 percent for issuers in the large group market; and
  • 80 percent for issuers in the small and individual group markets.

Issuers that do not meet the applicable MLR standard must provide rebates to consumers.
The MLR requirements became effective for issuers in 2011. Beginning with the 2014 MLR reporting year, issuers must report their MLR data to the Department of Health and Human Services (HHS) by July 31 following the end of an MLR reporting year. Rebates must be provided by Sept. 30 following the end of the MLR reporting year. For the 2014 reporting year, issuers are required to pay rebates by Sept. 30, 2015.

Employers that expect to receive rebates should review the MLR rebate rules and decide how they will administer the rebates. For assistance with rebates, please contact your Risk Management Advisors, Inc. representative...Read More