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Transitional Reinsurance Program Fee Update

01/28/13

  04:36:46 pm, by MedBen5   , 334 words,  
Categories: News, Health Plan Management

Transitional Reinsurance Program Fee Update

Several months ago on this blog, MedBen described the Affordable Care Act (ACA) regulations establishing payments due from group health plans for use in funding a transitional reinsurance pool for carriers in the non-grandfathered individual market. The regulation – published by the Department of Health and Human Services (HHS) – requires group health insurance carriers and third party administrators, on behalf of group health plans, to contribute funding to the reinsurance program.

In its December 7, 2012 Notice of Payment Parameters, HHS set forth the amount of the reinsurance fee for 2014 and described the method of collection. The reinsurance fee is imposed on fully-insured carriers and self-funded plan sponsors. The December 2012 guidance clarified that while third party administrators are responsible for remitting the fee to HHS, each self-funded plan sponsor is ultimately liable for paying the fee.

For 2014, the fee due equals $5.25 per month (or $63.00 per year) for each covered life (employees and dependents) enrolled in “major medical coverage”. Generally, that includes all medical benefit plans and policies except hospital indemnification policies, stand-alone dental or vision plans, integrated HRAs, HSAs, FSAs, EAPs, disease management and wellness plans that don’t provide medical benefits, or stop-loss policies. In addition, individual states can add amounts to this fee (a “state supplemental contribution rate”) to cover administrative expenses or additional reinsurance payments.

No later than November 15, 2014, fully-insured carriers and self-funded plan sponsors (each considered a “contributing entity”) must submit enrollment information to HHS in order for HHS to calculate the reinsurance fee due. Within 15 days of that submission, HHS will inform the contributing entity of the amount owed for the 2014 reinsurance contribution. Payment must be made to HHS within 30 days of receiving the HHS notification of the annual reinsurance contribution owed. The methods allowed for counting covered lives are, generally, the same as those used to count covered lives for calculating the Patient-Centered Outcomes Research Institute (PCORI) Trust Fund fee.

MedBen clients with questions regarding the transitional reinsurance program fee may contact Vice President of Compliance Caroline Fraker at 800-851-0907.

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