HHS Proposes 3rd Year Fee of $27 for ACA Transitional Reinsurance Program

On 11/21/2014, federal regulators proposed that insured and self-funded employers would have to pay $27 for each health plan enrollee in the third and final year of the Transitional Reinsurance Program, authorized by the Patient Protection and Affordable Care Act (PPACA). Self-funded employers pay this fee separately, where insured employers have this fee built into their rate.

The $27 fee, to be paid in 2017, has been proposed and is not final. It comes on top of an earlier disclosed $63-per-health-care-plan-participant fee that is to be paid next year, and a $44-per-participant fee that is to be paid in 2016.

The fees, whose amounts were set by the U.S. Department of Health and Human Services, are intended to generate $25 billion in revenues over a three-year period as set by the Patient Protection and Affordable Care Act, including $12 billion in the first year, $8 billion in the second year, and $5 billion in the third year.

The revenue generated by the program is to be used by the government to partially reimburse commercial insurers covering individuals with high health care costs.

Earlier, regulators said the 2014 fee could be paid in full with one $63-per-participant payment made by 1/15/2015. Alternatively, rather than pay the full $63 by 1/15/2015, employers could make a payment of $52.50 per participant by that date, with an additional $10.50-per-participant payment due 11/15/ 2015. Employers and health care plan sponsors also can choose between paying the 2015 and 2016 fees with one payment or with two payments.

The 2015 fee could be paid in full with one $44-per-participant payment made by 1/15/2016, or with a $33 payment made by that date, and an $11 payment made by 11/15/2016.

Similarly, the $27-per-participant fee for 2016 could be paid in full by 1/15/2017, or with a $21.60 payment made by that date, and a $5.40 payment made by 11/15/2017.

More information can be found at:
http://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/The-Transitional-Reinsurance-Program/Reinsurance-Contributions.html
http://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/The-Transitional-Reinsurance-Program/Downloads/Reinsurance-Contributions_Pay-gov-Form-Go-Live_10_17_14.pdf