H&W: Transitional Reinsurance Program Fee

Transitional Reinsurance Program Fee: The Affordable Care Act (ACA) establishes a transitional Reinsurance Program  to help stabilize premiums for coverage in the individual market during the years 2014 through 2016. The statute requires all health insurance issuers and third-party administrators on behalf of self-insured group health plans to make contributions under this program.

For fully insured plans, the fee will be paid by the insurer. Self-insured group health plans are liable for the fee, although a plan may utilize a third-party administrator or administrative-services-only contractor for transfer of the contributions.

The amount of the contribution for 2014 is $5.25 per covered life per month. Plans must report enrollment to Health and Human Services (HHS) by November 15th. HHS will notify the employer of the amount of the contribution due by December 15th or thirty days after receiving the report. HHS will bill for the amount owed in two installments.

Compliancedashboard has been updated with a new compliance activity (for self-insured plans) and reference material that describe a plan sponsor’s obligations under this program.