Insurers estimate that they will pay more than $759 million in medical loss ratio rebates across commercial markets in 2026.
KFF’s preliminary analysis is based on insurer-reported financial data from market database Health Coverage Portal TM.
The ACA established an MLR provision that caps the share of insurers’ premium income used for administrative work, marketing and profits. While payers in the individual and small group markets must spend at least 80% of premium income on claims and quality improvement, those in the large group market must spend at least 85% on those areas.
Only fully insured, not self-funded, plans follow the MLR provision. Two-thirds of people with employer-sponsored insurance are in self-funded plans.
Here are four things to know:
1. Since the ACA kicked off the rebate requirement in 2012, a total of $14.4 billion in rebates has been issued to individuals and employers. Looking at 2026, this total could come out to roughly $15.1 billion.
2. Total rebates were higher in 2024 and 2025, at $958 million and $1.6 billion, respectively. Insurers issued a record-high rebate total of $2.5 billion in 2020.
3. The average rebate per person in 2025 was $233, $190 and $91 for those in the individual, small group and large group markets, respectively. Enrollees may only receive a portion of that, though, as rebates could be shared with the employer or used to offset future premiums.
4. The average simple loss ratio — which excludes quality improvement expenses and tax adjustments — in 2025 was 93%, 87% and 91% across individual, small group and large group markets, respectively. A higher ratio indicates insurers put most premium income toward health claims and may have come out less profitable. Rebates issued in 2026 depend on an average from the three years preceding the issuing year. Thus, even insurers with higher loss ratios in 2025 may still owe rebates due to recent profitable years.
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