Legislative Analysis
Phone: (517) 373-8080
CODIFYING MEDICAL LOSS RATIO REBATES http://www.house.mi.gov/hfa
House Bill 5825 (H-3) as passed by the House Analysis available at
Sponsor: Rep. Julie Rogers http://www.legislature.mi.gov
Committee: Insurance and Financial Services
Complete to 12-13-24
SUMMARY:
House Bill 5825 would amend the Insurance Code to require insurers that deliver, issue for
delivery, or renew health insurance policies in Michigan to issue rebates, in accordance
with federal law and regulations, to those it insures if the insurer does not meet the medical
loss ratio as required by the federal Patient Protection and Affordable Care Act (ACA).
Insurers that file their medical loss ratio and other rebate information with the United States
Department of Health and Human Services would be required to concurrently file the
information with the Michigan Department of Health and Human Services.
An insurer that complies with the ACA’s rebate requirements would be considered to be
in compliance with the bill.
The bill would not apply to grandfathered health plan coverage, as defined in federal
regulations, or to health insurance policies not required to issue rebates by the ACA,
including plans that cover retirees.
Proposed MCL 500.3406jj
BACKGROUND:
The ACA requires insurers to spend at least 80% or 85% of premium dollars on medical
care quality improvement (known as the medical loss ratio), as opposed to administrative
costs, overhead, profits, or other nonmedical items. An insurer that fails to meet this
standard is required to provide a rebate to its customers. 1 The Kaiser Family Foundation
has estimated about $1.0 billion in rebates are issued across all commercial insurance
markets each year, including for 2024. Rebates are estimated to have exceeded $2.5 billion
in both 2020 and 2021. 2
Supporters of the bill argued that it is important to codify the protections of the ACA in
state law to ensure that they are continued in the event federal policy changes.
1
https://www.cms.gov/marketplace/private-health-insurance/medical-loss-ratio
2
https://www.kff.org/private-insurance/issue-brief/medical-loss-ratio-rebates/
House Fiscal Agency Page 1 of 2
FISCAL IMPACT:
House Bill 5825 would not have a fiscal impact on any units of state or local government.
POSITIONS:
A representative of the Michigan Council of Nurse Practitioners testified in support of the
bill. (11-14-24)
The following entities indicated support for the bill (11-14-24):
• Michigan Occupational Therapists Association
• American Physical Therapy Association Michigan
Legislative Analyst: Alex Stegbauer
Fiscal Analyst: Una Jakupovic
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 5825 (H-3) as passed by the House Page 2 of 2


Statutes affected:
Substitute (H-3): 500.100, 500.8302
House Introduced Bill: 500.100, 500.8302
As Passed by the House: 500.100, 500.8302
As Passed by the Senate: 500.100, 500.8302
House Concurred Bill: 500.100, 500.8302