HHS Issues Final Rules on ACA Transitional Reinsurance Program

Final regulations issued recently by HHS have indicated the possibility of exempting “certain self-insured, self-administered” health plans from the ACA's transitional reinsurance program (TRP) fee.  Under Section 1341 of the ACA, 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.

These final regulations, which address a range of other issues including exchange eligibility verification, include two important items.  First,  HHS is contemplating an exemption that would only apply to self-insured plans that are “self-administered” – i.e., plans that do not use a third-party administrator (TPA).  Self-administered plans would not have to pay the fee.  However this is expected to be a very small number of self-insured plans since the majority of self-insured plans use TPAs.  Additionally, the preamble suggests that HHS will soon propose a rule to allow for the collection of the full fee for each year in two phases, under which the actual reinsurance component of the fee would 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 recollection of Early Retiree Reinsurance Program expenditures would be due at the end of the following calendar year (i.e., in late 2015 for the 2014 fee).