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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104





March 14, 2013 

 State and Federal Law Alert


HHS Issues Final Regulations on PPACA's Transitional Reinsurance Fees


HHS has issued final regulations on group health plan sponsors' liability under the transitional reinsurance fee provisions of the Patient Protection and Affordable Care Act ("PPACA"). 


During the first three years that the Health Insurance Exchanges are in effect (i.e., 2014 through 2016), employer-sponsored group health plans are subject to PPACA's transitional reinsurance fees. These fees will be used to fund transitional reinsurance programs, which are designed to protect against premium increases caused by the implementation of the 2014 market reform rules, particularly guaranteed availability.


The final regulations offer much needed clarification about the assessment, calculation and payment of these fees, including the following: 

  • The transitional reinsurance fee for 2014 will be $63 per covered life. Although HHS suggested that the 2014 fee might be lowered, this is the same amount as set forth in the proposed regulations.
  • The fee applies on a per-covered-life basis, which includes spouses, children and domestic partners.
  • Plan sponsors may use one of the following methods to calculate the number of covered lives:
    • the actual count method (i.e., the plan sponsor adds the number of lives covered on each day, and divides that number by the by the number of days in the plan year);
    • the snapshot method (i.e., the plan sponsor uses total lives covered on one day in each quarter of the plan year); or
    • the Form 5500 method (i.e., the plan sponsor uses a specified formula thatincludes the number of participants actually reported on the Form 5500 for the plan year).
  • The fee is applicable only to group health plans that provide "major medical coverage," which is defined as health coverage for a broad range of services and treatments, including diagnostic and preventive services, as well as medical and surgical conditions. As a practical matter, this includes typical PPO, HMO and high-deductible health plan coverages, whether insured or self-insured.
  • Qualified beneficiaries receiving COBRA continuation coverage must be counted as covered lives.
  • Health savings accounts, health reimbursement arrangements, flexible spending arrangements, prescription drug coverage, dental and vision plans offered on a stand-alone basis, and other programs providing ancillary benefits are generally not major medical coverage and are not a factor in the assessment of plan sponsors' fee liabilities.
  • For employees who have both Medicare and employer-provided coverage, when Medicare is the primary payer, the employer coverage is not considered major coverage and the employee is not counted as a covered life.
  • Plan sponsors must report the total number of covered lives to HHS by November 15 (of 2014, 2015 and 2016). In turn, HHS will notify plan sponsors of their fee assessment by December 15. Plan sponsors will then be required to remit fee payments to HHS within 30 days of receiving the fee assessment notices.
  • Plan sponsors that maintain multiple group health plans that provide major medical coverage for the same covered lives may combine the plans to prevent double counting. Plan sponsors may deduct the reinsurance fees for income tax purposes as ordinary and necessary business expenses.
  • Self-insured plans may use plan assets to pay the fee assessments. 

Given the financial impact of the reinsurance fees, group health plan sponsors are advised to begin estimating the amount of transitional reinsurance fees that their plans will be assessed and factor these amounts into their 2014 budgets.    


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Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.