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Obamacare FAQ of the Month: What Are Transitional Reinsurance Fees, and How Do We Pay Them?

October 2014

By: Peter E. Hansen, Esq.

The Affordable Care Act established temporary transitional reinsurance fees, which are scheduled to run from 2014 through 2016, in order to stabilize premiums for coverage under health insurance plans offered through the health exchanges. The fees require group health insurance issuers and self-funded group health plans to contribute $63.00 per covered individual to the Department of Health & Human Services, which then redistributes the fees to individual market health plans that enroll higher-cost individuals.

Responsibility for reporting and paying the fees depends on what type of health plan your company sponsors. Health insurance issuers are responsible for reporting and paying the fees for fully-insured plans, whereas employers are responsible for both reporting and paying the fees for self-funded plans. Paying the fees is a three-step procedure, and the first step must be completed by November 15:

  • The insurance issuer/employer calculates the average number of individuals covered by the plan during the year, then submits that count to the HHS by November 15;
  • The HHS calculates the fee and notifies the insurance issuer/employer of the amount it must pay;
  • The insurance issuer/employer pays the fee through the Registration for Technical Assistance Portal by January 15, 2015.

If you sponsor a self-funded plan, then you should begin calculating the average number of lives covered by your plan immediately, and if you have not already done so, register for an account with the Registration for Technical Assistance Portal at https://www.regtap.info/. If you sponsor a fully-insured plan, you should consider verifying that your issuer will pay the fees with your carrier or broker.

Questions? Suggestion for a future Obamacare FAQ of the Month? Please contact WS Attorney Peter E. Hansen at (262) 560-9696, or email pehansen@wesselssherman.com .