Affordable Care Act (ACA) 2021 Medical Loss Ratio (MLR) Rebates

What Is the ACA’s MLR?

In general, the ACA’s MLR is the percentage of insurance premium dollars that a health insurer spends on health care services and expenses reported as activities to improve health care quality.

The ACA set MLR standards for health insurers. For the 2021 MLR reporting year, the MLR standard for the Montana large group market is 85%. The MLR standard for the individual and small group markets in Montana is 80%.

The ACA’s commercial MLR standards apply to certain fully insured health insurance coverages in the group and individual markets. If an insurer’s MLR doesn’t meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may provide MLR rebates in that market.

ACA MLR Rebates

Blue Cross and Blue Shield of Montana (BCBSMT) will provide MLR rebates in the Montana individual market because we didn’t meet or exceed the ACA’s MLR standard in that market for the 2021 MLR reporting year.

We will provide MLR rebates in the Montana individual market by Sept. 30, 2022.

For more information, please read Key Questions About the ACA’s MLR.

Key Questions About the ACA’s MLR

Q. What is the ACA’s Medical Loss Ratio (MLR)?

A. In general, the ACA’s MLR is the percentage of premium dollars that a health insurer spends on health care services and expenses reported as activities to improve health care quality.

The ACA set MLR standards for health insurers. For the 2021 MLR reporting year, the MLR standard for the Montana large group market is 85%. The MLR standard for the individual and small group markets in Montana is 80%.

The ACA’s commercial MLR standards apply to certain fully insured health insurance coverages in the group and individual markets. They don't apply to self-insured group health plans or to Medicare and Medicaid.

If an insurer’s MLR doesn’t meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may provide MLR rebates in that market.

Q. For purposes of the ACA’s MLR, what types of activities are considered to be quality improvement activities?

A. Among other things, activities to improve quality of care are designed to improve health outcomes for members. For example, these activities may include:

• Enhance patient safety
• Promote health and wellness
• Improve transparency
• Support meaningful use of health information technology, or
• Prevent hospital readmissions

In general, these activities are aligned with criteria developed by professional medical associations, government agencies, accreditation bodies and other nationally recognized health care quality organizations.

Q. When will any MLR rebates be provided?

A. MLR rebates will be provided in the Montana individual market by Sept. 30, 2022.

Q. How will any MLR rebates be distributed?

A. In general, MLR rebates may be issued in the form of a check or premium credit.

Q. Why are you providing MLR rebates in the Montana individual market?

A. We are providing MLR rebates in the Montana individual market because we didn’t meet or exceed the ACA’s MLR standard in that market for the 2021 MLR reporting year.