Final answer:
Insurance companies must spend at least 85 percent of all premium dollars from large employers on benefits and quality improvements.
Step-by-step explanation:
Insurance companies are required to spend at least 85 percent of all premium dollars from large employers on benefits and quality improvements. This is known as the Medical Loss Ratio (MLR) requirement.
The MLR is a provision of the Affordable Care Act that aims to ensure that a significant portion of premium dollars are used to provide healthcare services to policyholders rather than being spent on administrative costs or profits.
For example, if an insurance company receives $100 in premium dollars from a large employer, at least $85 of that must be spent on benefits and quality improvements for policyholders.