Full Definition
The Medical Loss Ratio is the percentage of premium revenue that a health insurer spends on medical claims and quality improvement activities. The ACA requires large group insurers to maintain an MLR of at least 85% (80% for small group and individual markets). If an insurer's MLR falls below the threshold, it must rebate the difference to policyholders. MLR is less relevant for self-funded employers, who bear claims risk directly.