Group health plans that provide major medical coverage will be assessed a "transitional reinsurance fee" for 2014, 2015 and 2016. The fee is $63 per participant per year for 2014, $44 per participant per year for 2015 and still to be set for 2016. Participant counts are based on the first nine months of each year must be submitted to HHS by November 15, 2014, 2015, and 2016.
Plans that provide "excepted" benefits (e.g. EAPs, or stand-alone dental or vision plans) are exempt, as are so-called "skinny" plans that do not provide "minimum value." (Generally, "minimum value" means that the plan's share of the total cost of plan benefits is at least 60%.) Additionally for 2015 and 2016 only, self-insured plans that are also self-administered (generally large multiemployer plans) are exempt from the fee.
For insured plans, the insurer is responsible for paying the fee. For a self-insured plan the plan is responsible, but may use a third-party administrator to transfer the fees.
An "ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form" will be available on pay.gov on which the participant count and other information must be submitted and the form will auto-calculate the contribution amount. HHS will offer training on this process. There are four methods for determining the average number of participants – these are the same methods that may be used to calculate the Patient Centered Outcomes Research Institute (PCORI) Fee.
The fee is due in two installments. For 2014, the first installment in the amount of $52.50 per participant is due January 15, 2015. The second installment of $10.50 per participant is due in the fourth quarter of 2015. For 2015, the two installments will be $33 per participant due January 15, 2016 and $11 per participant due in the fourth quarter 2016.
The fee can be passed on to participants or paid from plan assets. It is deductible as a business expense.
The purpose of the fee is to raise a total of $25 billion, $20 billion of which will be paid to insurers who are offering coverage in the individual market for higher risk populations. The remaining $5 billion is to be paid to the U.S. Treasury for the costs of the early retiree reinsurance program (ERRP).
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