A medical loss ratio (MLR) is the percentage of insurance premium dollars spent on health care claims.
Beginning on January 1, 2011, insurance companies will be required to report the proportion of premium dollars spent on clinical services and other costs. If an insurer does not meet the minimum medical loss ratio, the company will be forced to refund the difference to policyholders.
For large group plans, the minimum medical loss ratio is 85%. For small group and individual plans, the minimum medical loss ratio is 80%.