The latest final regulations on the transitional reinsurance fee provide some clarity for plan sponsors. As a reminder, the transitional reinsurance program requires self-insured group health plans and health insurance issuers to pay per-enrollee fees each year beginning in 2014.
- 2014 Fee Amount: As we previously reported, the fee for 2014 remains at $63 per covered life.
- 2015 Fee Amount: For 2015, the transitional reinsurance fee will be $44 per covered life. The fee for 2016 has not been determined.
- New Installment Payments: The transitional reinsurance fee will be collected in two installments. The first installment will be due at the beginning of the calendar year following the benefit year, with the remainder due at the end of that calendar year. The first installment represents the portion of the fee that actually goes to fund the transitional reinsurance program; the second installment represents the portion of the fee that is paid to the U.S. Treasury.
- Mark Your Calendars: Assuming a plan submits its enrollment count in November 2014 and receives an invoice in December 2014, $52.50 per covered life will be payable in January 2015 and $10.50 per covered life will be payable late in the fourth quarter of 2015. For 2015, $33 per covered life will be payable in January 2016 and $11 per covered life will be payable late in the fourth quarter of 2016. As noted above, the fee amount for 2016 has not been determined.
- Fee Exemption: Plans that are both self-insured and self-administered do not have to pay the transitional reinsurance fee for 2015 and 2016. Most employer-sponsored self-insured plans will not qualify for this exemption; for example, self-insured plans that use a third party administrator (TPA) to process claims would not be a “self-administered” plan.
- Applicable Coverage: Contributions must be made for “major medical coverage.” The final regulations clarify that, for purposes of the fee, major medical coverage includes catastrophic plan coverage.