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Definition and Importance

MLR is a basic financial measurement used in the Affordable Care Act (ACA) to encourage health plans to provide value to members. If an insurer or HMO uses 80 cents out of every premium dollar to pay for customers’ medical claims and activities that improve the quality of health care, the company has an MLR of 80%. This means the insurer is using the remaining 20 cents of each premium dollar to pay for overhead expenses. The ACA sets a minimum MLR for different market segments (employer-provided plans or individual plans), including; 80% for individual consumers, 80% for small employers and 85% for fully insured large employers.

Under the ACA, insurance companies and HMOs must report their MLR to the U.S. Department of Health and Human Services to ensure that they are providing value to their members. If they fail to meet a particular threshold, which means claims were less than expected for a given year, they pay a rebate to individual consumers or employer groups. The rebate is the difference between the actual MLR and the threshold MLR.

We are committed to complying with all Federal laws regarding MLR.

Rebate Mailings

Health plans must submit their Medical Loss Ratio (MLR) report to U.S. Department of Health and Human Services by July 31 of each year.

Health plans must issue any rebates by September 30 of each year.

If a rebate is due to individual consumers who purchase health plans on their own:

  • Rebates are paid to the contract holder, or subscriber, of the policy.

If a rebate is due to an employer:

  • Members who get their health coverage through their job will get a letter if their employer is getting an MLR rebate. However, federal law requires that insurers pay rebates directly to the employer group. The employer is responsible for determining how to best use the rebate in accordance with Federal law. Please contact your employer or Benefit Administrator for more details.

MLR Calculations

The MLR is a comparison of total claims by market segment (whether you get your plan through your job or buy it on your own) divided by total revenue by market segment, expressed as a percentage. If the percentage meets or exceeds the required level by market segment, then no rebate is due. Rebates are due when the thresholds are not met.

If a rebate is due:

  • Current eligible Florida Blue members with a monthly premium due will get their MLR rebate as a credit on their invoice.
  • Current eligible Florida Blue members with no monthly premium due, employers and consumers who no longer have a Florida Blue health plan will get their MLR rebate via a check in the mail.

Frequently Asked Questions

If a rebate is due:

  • Individual policyholders who buy their own coverage will automatically get a check or a premium credit. You don’t have to request one. To check if you are receiving an MLR refund this year, log in to your account at floridablue.com and click Claims & Expenses, then Financial Summary. You’ll see a message there and, if you’re eligible, your rebate amount will also appear. This information is usually available by mid-September.
  • Members who get their coverage through their job will get a letter saying that their employer is getting a rebate. However, federal law requires that insurers pay rebates directly to their employer group and the employer is responsible for determining how to best use the rebate. Please contact your employer or Benefit Administrator for more details.

If a rebate is due, you’ll automatically get a check or a premium credit. You don’t have to request one. To check if you are receiving an MLR refund this year, log in to your account at floridablue.com and click Claims & Expenses, then Financial Summary. You’ll see a message there and, if you’re eligible, your rebate amount will also appear. This information is usually available by mid-September.

Members who get their coverage through their job will get a letter saying that their employer is getting a rebate. However, federal law requires that insurers pay rebates directly to their employer group and the employer is responsible for determining how to best use the rebate in accordance with Federal law. Please contact your employer or Benefit Administrator for more details.

No, our premiums are based on the amount of expected claims in a given year. Because health insurance claims can vary greatly, we don’t know what the exact cost of providing your coverage will be until after the end of the year. If we have not met the MLR threshold, we will pay a rebate.

No, MLR rebates must follow Federal reimbursement guidelines. Our premiums are based on the amount of expected claims in a given year. Because health insurance claims can vary greatly, we don’t know what the exact cost of providing your coverage will be until after the end of the year. If we have not met the MLR threshold, we will pay a rebate. Florida Blue will, however, apply the rebate as a credit to the current invoice for any member with a monthly premium due. 

Please contact your employer or Benefit Administrator for more details.

Yes, if you were a policyholder, also called a subscriber, enrolled in more than one health plan during the last calendar year, you may be eligible to receive a rebate from one or both health plans.

No, rebates are based on MLR calculations that can vary greatly from year to year.

Rebates are distributed based on the MLR requirements for the health benefits of your plan and the type of plan you have (employer plan or individual plan). Therefore, it is possible that one set of benefits might meet the MLR threshold (and not require that a rebate be issued) and that another set of benefits might not meet the MLR threshold (and require a rebate).

The amount of a rebate is determined by the MLR calculation for the health benefits of your plan. If your rebate amount is different than someone else’s, it’s likely that he or she is enrolled in different benefits and received a different MLR calculation.

No two health insurance companies are the same. The rebates issued by Florida Blue are directly related to the revenue and medical costs we received. These factors can be very different between health insurance companies, resulting in different amounts paid towards rebates.

More Information

To learn more about MLR and other health care reform provisions, please visit the Centers for Medicare and Medicaid Services at CMS.gov.

In addition to the resources shown above, please contact your agent or Florida Blue sales representative with questions specific to your health plan.

This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). It does not attempt to cover all of the law’s provisions and is not intended as tax or legal advice. We encourage members to seek professional advice including legal counsel, regarding how the new requirements may affect you.