Protection and Affordable Care Act ("ACA") requires
insurance issuers and self-funded group health plans to pay a fee to
HHS to fund the Transitional Reinsurance Program (the
"Program"). These fees, which are based on the total number
of covered lives during the calendar year, are payable to HHS starting
in 2014 and ending in 2016. Self-funded group health plans must
register and provide annual enrollment data for the 2014 calendar
year to HHS no later than November 15, 2014.
Background. The ACA established the Program to stabilize premiums
in the individual market inside and outside of the Health Insurance
Marketplaces. The Program will collect contributions from insurers
and self-funded plans for the 2014, 2015 and 2016 calendar years.
These contributions will be used to fund the Program's administrative
costs and to help insurers pay for the high-cost enrollees that they
must cover because of the ACA's guaranteed-issue and no-rescission
issuers and self-funded group health plans providing major medical
coverage must pay reinsurance fees based on the total number of
covered lives during the calendar year. Insurers are responsible for
making reinsurance fee payments for insured plans and plan sponsors
are responsible for making reinsurance fee payments for self-funded plans.
Plan sponsors may use a third party administrator ("TPA")
to calculate the total number of covered lives and remit payments to
Reinsurance Fee. For 2015 and
2016, a self-funded group health plan is exempted from paying
reinsurance fees if it does not employ a TPA to perform the plan's
core administrative functions (i.e., claims processing and
plan operations). To qualify for this exemption, a self-funded plan
cannot use the TPA for more than 5 percent of the plan's core
administrative functions. This is a narrow exemption, and HHS expects
that few plans will meet this requirement.
2014 Deadlines. For the 2014 calendar year, self-funded plans must
calculate the total number of covered lives and provide enrollment
data to HHS by November 15, 2014. (See the Alert of 3/14/13
for information on approved methods for calculating the number of
covered lives for a calendar year.)
will pay the 2014 reinsurance fees in two installments. The first
installment will be invoiced by HHS by December 15, 2014, and the
second installment will be invoiced during the fourth quarter of
2015. Payments are due within 30 days of the date of the invoice.
Plans may opt to pay the 2014 reinsurance fee amount in one payment,
no later than January 15, 2015.
Payment. The steps for
registering with HHS and paying the reinsurance fee are as follows:
- Go to https://www.pay.gov/public/form/entry/101/#
- Enter basic entity information, contact
information, annual enrollment counts for 2014, and information
for the plan's designated bank account from which the fee
payment will be made (NOTE: the fee amount will automatically be
- Select whether the plan will pay in one or
two installments and select payment dates.
- Payment will be automatically deducted from
the plan's designated bank account on the selected dates.