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Little Chance That Transitional Reinsurance Fee Will Decrease

04/23/13

  05:05:58 pm, by MedBen5   , 197 words,  
Categories: News, Health Plan Management

Little Chance That Transitional Reinsurance Fee Will Decrease

Beginning next year, an Affordable Care Act regulation will require group health insurance carriers and third party administrators, on behalf of group health plans, to contribute funding to a reinsurance transitional reinsurance pool for carriers in the non-grandfathered individual market. The fee will equal $63.00 for each covered life under a plan in 2014, with decreases in ensuing years. Or so we were told.

According to Thompsons’ Smart HR Manager Blog, a U.S. Department of Labor official recently told an employer plan industry group that fee decreases would only occur if the reinsurance fund realized a surplus, or the government collected more than $10 billion in the first year.

The DOL official, who asked to remain anonymous, also said that if employers fail to contribute enough money to cover reinsurance claims, then the rate of $63 per covered life will remain, but outgoing claims will be paid on a diminishing pro rata basis.

The transitional reinsurance program is designed to reduce the uncertainty of insurance risk in the individual market by making payments to establish a pool of funds from which individual carriers can request reimbursement for their unanticipated high claims costs resulting from health care reform’s expanded coverage.

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