Surprising news has come out of a new ACA regulation released by the US Department of Health and Human Services (HHS) indicating that “certain self-insured, self-administered” health plans may be exempted from paying the reinsurance fee for the 2015 and 2016 plan years. These plans would still be subject to the fee for the 2014 plan year.

According to the American Benefits Council, of which The Alliance is a member, HHS officials have “informally clarified that the exemption they are contemplating would only apply to self-insured plans that are ‘self-administered’ – i.e., plans that do not use a third-party administrator (TPA).” Since most self-funded employers use TPAs to administer their benefit plans, few Alliance members are expected to benefit from this exemption unless HHS rethinks its direction.

stethoscope and gavelThe reinsurance fee will first come due for self-funded employers and insured plans in early 2015 after employers submit their enrollee counts to HHS in late 2014. In the first year, the tax is anticipated to be $63 per enrollee. More information about the Temporary Reinsurance fee can be found in this Alliance brief: pdf Final Regulations Clarify Payment Requirements for Temporary Reinsurance Program.

The fees are intended to fund programs that will help stabilize insurance rates in the individual market and will not benefit self-funded employers. Amounts for 2015 and 2016 have not yet been established but must reap a certain level of program dollars ($8 billion in 2015 and $5 billion in 2016). Thus, exempting certain plans from the payment may increase the fees in those years for self-funded plans and insured plans that remain subject to the tax.

The Alliance will keep members informed as additional guidance is released on this topic. If you have any questions, feel free to contact Melissa Duffy

Melissa Duffy

Melissa Duffy

Melissa Duffy was the health policy consultant to The Alliance from 2008 through 2014, working to support health care advocacy within the cooperative's membership to help improve the cost and quality of health care and health insurance for businesses in Wisconsin, Illinois and Iowa. Melissa’s previous experience includes serving as the director of government affairs for the Wisconsin Federation of Cooperatives (WFC) and working in the Wisconsin State Capitol as clerk and lead policy advisor to the Senate Committee on Health, Human Services, Aging, Utilities and Veterans and Military Affairs. Melissa received her bachelor’s degree from the University of Wisconsin-Madison.

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Melissa Duffy