Medical Loss Ratio Rebate Definition
Under the Affordable Care Act (ACA), insurance carriers must refund premiums to consumers if less than 80 percent of premiums are paid out by the insurance provider for medical care. The remaining 20 percent of premiums are applied to administrative costs. This is known as the 80/20 rule, also known as the Medical Loss Ratio (MLR).
Under the new law, insurance companies must pay the refund by August 1 of each year.