HHS Finalizes Transitional Reinsurance Fee for 2015

NBCH thanks the American Benefits Council for the information provided in this post.

In final regulations issued on March 5, the U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) set the health plan transitional reinsurance program (TRP) fee at $44 per covered life for 2015.

Under Section 1341 of the Patient Protection and Affordable Care Act (PPACA), during the first three years that state health insurance exchanges are operational (2014 through 2016), health insurance issuers and plan administrators (on behalf of self-insured group health plans) will be assessed a per-enrollee fee to finance a three-year transitional reinsurance program. The contribution rate for 2014 is $63 per covered life for the year.

The final regulations also adopt an exception for "self-insured, self-administered plans" from the requirement to make TRP contributions for the 2015 and 2016 years, as proposed in prior regulations. This exception applies to self-insured plans that do not use a third-party administrator for their “core administrative functions of claims processing or adjudication (including the management of internal appeals) or plan enrollment.” The exception is more likely available to multiemployer plans that self-administer and not self-insured employer plans that typically use third party claims administrators.

The final regulations also incorporate the new collection schedule prescribed in the prior proposal, in which the fee will be collected in two phases each year. The actual reinsurance component of the fee will be due at the beginning of the following calendar year (i.e., in early 2015 for the 2014 fee) and the component of the fee attributable to the collection of Early Retiree Reinsurance Program expenditures will be due at the end of the following calendar year (i.e., in late 2015 for the 2014 fee). In addition, the final regulations provide that “major medical coverage” means, for purposes of the TRP, a catastrophic plan, an individual or small group market plan subject to certain actuarial value requirements, or health coverage for a broad range of services and treatments provided in various settings that provides minimum value.