Aetna Meets 2023 MLR Requirements for CA Small Group Plans
Aetna announced that they met the minimum medical loss ratio for 2023 plans in California. For other states and markets, please see Aetna's 2023 MLR Experience Year Rebate Pools flyer. Read below for more information on what the MLR requirements are and how Aetna calculates them.
Background
The medical loss ratio (MLR) is the percentage of premium dollars that a health insurer spends on health care costs and quality improvement. The ACA sets a minimum amount for the MLR.
For large group plans, the MLR must equal at least 85 percent of premiums. Taxes and fees are deducted before making this calculation. The MLR must be at least 80 percent for small group plans and individual plans. Some states have higher MLR minimums.
To calculate the MLR, we first place policyholders into pools. There’s a pool for each insurance market in a state (large group, small group and individual) and for each legal entity that issues coverage. Aetna calculates an MLR for each pool. They don’t calculate MLR separately for each customer or group.
If Aetna does not meet the minimum MLR for any pool, they send out rebates. Fully insured medical plans are eligible for rebates. Self-insured plans are not. Most plans don’t get rebates.
If a rebate is due for a given year, the employer will receive a notice on or before September 30 of the following year. In most cases, Aetna sends the rebate check to the employer. For individual policies, they send the rebate to the person who bought the health plan.
The federal government set guidelines that employers are required to follow when using rebate dollars.