MLR Rebates

The ACA requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement, also known as the Medical Loss Ratio (MLR). It also requires them to issue rebates to enrollees if this percentage does not meet minimum standards.

Requirements

• Carriers who do not meet MLR limits must send MLR Rebates and notices of rebates to policyholders.

• For an insured ERISA plan, the policyholder is the plan sponsor.  Plan sponsors who receive MLR rebate checks must pay the plan’s portion of the rebate amount to participants within 3 months or must establish a trust to hold the rebate as plan assets.