Employers with insured group health plans may soon receive a medical loss ratio (MLR) rebate from their health insurance issuers. Issuers who did not meet the applicable MLR percentage for 2023 must provide rebates to plan sponsors by Sept. 30, 2024. These rebates may be in the form of a premium credit or a lump sum payment.
HIGHLIGHTS AND ACTION STEPS
Issuers who did not meet their MLR percentage for 2023 must provide rebates by Sept. 30, 2024. As a general rule, an employer who receives a rebate should use it within three months to avoid ERISA’s trust requirement. For rebates received on Sept. 30, 2024, this three-month deadline is Dec. 30, 2024. This deadline should be adjusted for rebates received before Sept. 30, 2024. Employers who receive MLR rebates should also be prepared to answer questions from employees about the rebate and how it is being allocated.
MLR RULES
The MLR rules require health insurance issuers to spend a minimum percentage of their premium dollars on medical care and health care quality improvement. This percentage is 85% for issuers in the large group market and 80% for issuers in the small and individual group markets. States may set higher MLR standards than the federal 80%/85% thresholds. Issuers must report to the federal government how they spent their premium dollars for each calendar year by July 31 of the following year. Issuers who do not meet the applicable MLR standard must provide rebates by Sept. 30, following the end of the MLR reporting year. Issuers who issue rebates must provide plan sponsors and participants with a notice explaining the rebate and how it was calculated.
Related Blogs
Compliance
PUBLISHED
May 30th, 2025
Health Plans Must Expand Coverage for Breast Cancer Screening for 2026
DeAnn Deck
Effective for plan years beginning after Dec. 30, 2025, group health plans and health insurance issuers must expand their first-dollar coverage for preventive care ...
Read More
Benefits+
PUBLISHED
May 29th, 2025
Federal Court Vacates PWFA Abortion Accommodation Mandate
DeAnn Deck
On May 21, 2025, the U.S. District Court for the Western District of Louisiana vacated the U.S. Equal Employment Opportunity Commission’s (EEOC) requirement that ...
Read More
Compensation and Total Rewards
PUBLISHED
May 20th, 2025
How Employers Are Shaping Sustainable Compensation Strategies in 2025
Julie Bingham
After years of pressure on compensation programs due to a highly competitive labor market, changing employee priorities, and rising inflation and cost of living, ...
Read More
Benefits+
PUBLISHED
May 16th, 2025
HSA/HDHP Limits Will Increase for 2026
DeAnn Deck
On May 1, 2025, the IRS released Revenue Procedure 2025-19 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health ...
Read More
Benefits+
PUBLISHED
May 15th, 2025
New Executive Order Aims to Reduce Drug Costs by Aligning with Global Prices
DeAnn Deck
On May 12, 2025, President Donald Trump issued an executive order (EO) that aims to bring the prices Americans pay for prescription drugs in ...
Read More
Compliance
PUBLISHED
May 15th, 2025
Form 5500 Deadline is July 31
DeAnn Deck
Each year, employers that are subject to the Employee Retirement Income Security Act of 1974 (ERISA) must electronically file an annual report (Form 5500) ...
Read More