2015 Transitional Reinsurance Fee Deadline Approaching

2015 Transitional Reinsurance Fee Deadline Approaching

The Affordable Care Act (ACA) established three risk-spreading programs to provide payments to health insurance issuers that cover higher-risk populations and to more evenly spread the financial risk carried by issuers:

  •  A transitional reinsurance program
  •  A temporary risk corridor program
  •  A permanent risk adjustment program

The transitional reinsurance program is intended to help stabilize premiums for coverage in the individual market during the first three years of Exchange operation (2014, 2015 and 2016) when individuals with higher-cost medical needs gain coverage. This program imposes a fee on health insurance issuers and self-insured group health plans.

The Department of Health and Human Services (HHS) issued two separate final rules implementing the ACA’s standards for reinsurance, risk corridors and risk adjustment programs, on March 23, 2012, and March 11, 2013. HHS also published its Notice of Benefit and Payment Parameters for 2015 on March 11, 2014, which contains the 2015 reinsurance contribution rate, includes an exception for certain self-insured plans, and implements a two-installment collection schedule.

Click here to read who must pay the fees, how much the fees are, and most importantly, when they are due and what penalties apply if the deadline is not met.

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