Self-insured employers and self-administered health plans are about to catch a break, thanks to fine-tuning of the Patient Protection and Affordable Care Act by the Department of Health and Human Services.
In a soon-to-be-published compendium of rule modifications, HHS says it will exempt certain self-insured employers from the second two years of paying the reinsurance fee.
HHS says the proposed modifications — of which there are quite a few — are the result of its “listening” sessions with interested parties about specific requirements of the act. The full list can be found in the proposal, “Program Integrity: Exchange, Premium Stabilization Programs, and Market Standards; Amendments to the HHS Notice of Benefit and Payment Parameters for 2014.”
Mike Ferguson, the CEO of the Self-Insured Institute of America, welcomed the news.
"SIIA certainly has communicated the view to members of Congress and regulators that the reinsurance fee is unfair to self-insured employers," he said, adding, "We were frankly surprised to hear about this development and are trying to find out more details just like you."
Indeed, HHS didn't offer a whole lot of detail on the exemption matter. It said in order to address employer feedback that the fees are burdensome, it will accept payment of the fee in two chunks instead of one (at the beginning of 2014 and at the end of the year) and will “exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years” in future rulemaking and/or guidance proposals.
However, all employers will be required to pay the first-year fee for the program, which begins in 2014.
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The 2014 fee for the three-year Transitional Reinsurance Program was set at $63 per plan participant. Fee levels have not been set for 2015 and 2016.
The fees are designed to yield $25 billion over the three-year program – money that would help offset costs incurred by insurers covering high-cost individuals purchasing coverage in public insurance exchanges.
HHS’s missive addressed other matters, including what happens when a small company buys small group insurance, and then it becomes a large company. The employer can keep the small group insurance package as long as it doesn’t make substantial modifications to it. But if discontinues small group coverage, it will then have to purchase insurance through the large group exchanges.
HHS also promised to provide further guidance on the sticky issue of what constitutes a fulltime employee for purposes of the all-important employee head count.
The proposals are scheduled to be published in the Federal Register on Wednesday.