Medical loss ration (MLR) is the percentage of premium revenue that, under the ACA, a carrier is required to spend on medical care rather than administrative costs: 80% for individual/small-group markets and 85% for large-group markets. If a carrier's three-year rolling average MLR falls short, the shortfall must be rebated to policyholders. Insurers issued more than $1.6 billion in MLR rebates in 2025 alone, with the cumulative total since 2012 now at roughly $14.3 billion.
MLR does not apply to self-funded plans at all, which now cover roughly two-thirds of covered workers nationally. For carriers that are subject to it, classification matters as much as raw cost: spend that qualifies as a Quality Improvement Activity (QIA) counts toward the 80%/85% medical-spend floor a carrier must hit, while pure administrative spend does not.
Under the ACA's MLR requirement, carriers must spend 80% of premium revenue on medical care in individual and small-group markets, and 85% in large-group markets, or rebate the shortfall to policyholders.
Reducing avoidable ED and urgent care utilization directly improves how efficiently premium dollars are spent on necessary care, and a substantial share of that spend (roughly 75%, per HMA report data) can qualify as QIA/MLR-positive activity.
Insurers issued more than $1.6 billion in MLR rebates in 2025, bringing the cumulative total since the rule took effect in 2011 to roughly $14.3 billion.
No. MLR requirements apply only to fully-insured plans. Self-funded plans, which now cover roughly two-thirds of covered workers nationally, are exempt from the MLR rule entirely.
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