Rebate allocation worksheet
MLR rebate calculator
Enter the issuer-confirmed rebate, model the employer share, and compare contribution-weighted allocations across all four coverage tiers. No email or account required.
MLR rebate allocation worksheet
Model the split of an actual rebate.
Start with the amount on the issuer’s rebate notice. Apply an employer-share assumption, then allocate the employee pool using historical employee premium payments. The loaded figures are synthetic.
Employee only
Employee + spouse
Employee + children
Family
Issuer rebate entered$10,000.00
Modeled employer amount$7,500.00
Modeled employee pool$2,500.00
| Coverage group | Recipients | Group amount | Base per recipient | Additional cent |
|---|---|---|---|---|
| Employee only | 5 | $762.19 | $152.43 | 4 recipients |
| Employee + spouse | 2 | $609.76 | $304.88 | 0 recipients |
| Employee + children | 1 | $274.39 | $274.39 | 0 recipients |
| Family | 2 | $853.66 | $426.83 | 0 recipients |
Rounding is reconciled to the cent: $7,500.00 employer + $2,500.00 employee pool = $10,000.00 entered rebate. Within each group, the stated number of recipients receives one additional cent above the base amount.
Use the notice and the plan’s allocation rules
This worksheet does not infer an issuer’s rebate from one MLR percentage and a group’s gross premium. The issuer’s calculation has its own reporting and adjustment rules. Plan documents, contribution history and fiduciary decisions govern who is eligible and which allocation method is appropriate.
See CMS’s MLR guidance and DOL Technical Release 2011-04. Calculations and CSV generation run in your browser without an account or submission.
Official MLR sources
CMS explains the 80% and 85% standards in its Medical Loss Ratio overview and requires rebate notices and payments by September 30 in its official notice instructions.
What is medical loss ratio (MLR)?
The Medical Loss Ratio measures how much of premium dollars goes toward medical claims and quality improvement versus administrative costs and profit. The Affordable Care Act (ACA) requires health insurers to meet minimum MLR thresholds.
The 80/20 rule
MLR requirements by market
| Market | Minimum MLR | Description |
|---|---|---|
| Individual | 80% | Individual policies purchased on or off exchange |
| Small Group | 80% | Employers with 1-50 employees (1-100 in some states) |
| Large Group | 85% | Employers with 51+ employees (101+ in some states) |
Contribution-share illustrations
These illustrate proportional arithmetic. Plan documents, policy ownership and fiduciary review determine the permitted allocation for an actual rebate.
| Premium Scenario | Distribution | Notes |
|---|---|---|
| Employer pays 100% of premium | Employer keeps entire rebate | No employee distribution required |
| Employer pays 80%, employees pay 20% | 80% to employer, 20% to employees | Must distribute employee portion |
| Employer pays 50%, employees pay 50% | 50% to employer, 50% to employees | Split proportionally |
| Employees pay 100% (voluntary) | 100% to employees | Full rebate goes to employees |
Distribution methods to review for the plan
Document the allocation and timing
Review the plan’s applicable timing, trust and plan-asset obligations. Record the approved method, recipients, amounts and timing. See Technical Release 2011-04.
Example allocation of a confirmed rebate
Scenario
- Issuer-confirmed rebate: $10,000 (fictional)
- Employer contribution: 75% ($375,000)
- Employee contribution: 25% ($125,000)
- Allocation assumption: contribution-proportional employer/employee split
Rebate distribution
- Total rebate entered: $10,000
- Employer portion: $7,500 (75%)
- Employee portion: $2,500 (25%)
Where this fits in a renewal. In Planlined, renewal analysis compares renewal rates year over year and rate negotiation prepares the carrier and client discussion; its fictional counter-offer example costs a renewal against a counter and an alternate quote. The benefits glossary defines MLR rebate and the renewal terms around it.
A rebate paid to an ERISA plan raises plan-asset questions about how the participants' share is used; the ERISA compliance checklist covers the plan's fiduciary and document duties.
To see which carriers actually owed rebates in your state, the MLR rebates by state and carrier table breaks down CMS's 2024 filings by market and parent group.
Simplify benefits management
Planlined helps benefits brokers manage everything from plan comparisons to compliance tracking.
Frequently asked questions
What is Medical Loss Ratio (MLR)?
MLR is the percentage of premium dollars a health insurer spends on claims and quality improvement versus administrative costs and profits. The ACA requires insurers to meet minimum MLR standards or provide rebates.
What is the 80/20 rule for health insurance?
The 80/20 rule requires health insurers to spend at least 80% of premiums on medical claims and quality improvement (85% for large group). If they spend less, they must rebate the difference to policyholders.
How are MLR rebates distributed?
Review the plan documents, policy ownership and contribution history to establish the plan-asset portion and a permitted participant allocation method. The worksheet models a contribution-share scenario; it does not determine eligibility or choose the plan's fiduciary policy. DOL Technical Release 2011-04 explains the applicable considerations.
When are MLR rebates paid?
Insurers must provide any MLR rebate owed, along with the required notice, by September 30 of the year following the MLR reporting year.