H&W: Transitional Reinsurance Program Fee
Transitional Reinsurance Program Fee: Section 1341 of the Affordable Care Act provides that a transitional reinsurance program be established in each State to help stabilize premiums and spread risk for coverage in the individual market during the years 2014 through 2016.
All health insurance issuers, and third-party administrators (TPAs) on behalf of self-insured group health plans, will submit contributions to support reinsurance payments to issuers that cover high-cost individuals in non-grandfathered individual market plans.
On November 30, 2012, HHS issued a proposed rule that discusses the methodology of the assessment calculations, the mechanics of payment and amounts of the first year assessment. Under the proposed rule, the first-year assessment will be $5.25 per enrollee per month. The assessment will apply to those enrolled in “major medical plans,“ and to former employees and their dependents covered under COBRA.
The assessment does not apply to:
- HRAs that are integrated with a group health plan or HSAs (the major medical plan associated with the HRA or HSA would pay the assessment);
- Health FSAs, EAPs, or wellness programs that do not provide major medical coverage;
- Coverage that consists solely of excepted benefits; or
- Retirees enrolled in Medicare and receiving supplemental coverage from their former employers.
Although this assessment is lower than many benefit experts predicted, it still is a significant cost that will be added on to group health plans.
Click here to view the proposed rule.
