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Q 101: What is the “medical loss ratio” (MLR) requirement?

The ACA’s minimum “medical loss ratio” (MLR) requirement is that health insurers must spend at least a certain percentage of consumers’ premium dollars on direct medical care and health care quality improvement. That limits the amount of premium dollars spent on administrative expenses, such as overhead, marketing, salaries, and profit.

The ACA requires that health insurance companies providing coverage in the large employer market (more than 50 employees) must spend at least 85% of premiums on direct medical care and quality improvement activities. Health insurers who provide coverage in the small employer market (50 or fewer employees) and the individual market must spend at least 80% of premiums on direct medical care and quality improvement activities.

Q 102: What is an MLR rebate?

The minimum MLR requirement described above is equivalent to saying that the insurer’s profits and administrative expenses may not exceed 20% of premium in the individual or small group market, or 15% of premium in the large group market.  Under state and federal law, a health insurer that doesn’t meet this requirement must rebate the difference to consumers or employers.

Q 103: How can consumers learn if their insurer has paid rebates?

Companies that had to pay rebates in 2012 or 2013 are listed at

Last Updated: October 4, 2013