17 March 2015

Temporary Reinsurance Program Fee Announced For 2016

The amount of the temporary reinsurance program fee has been set for 2016, the final year of the program. Health Care Reform imposes an annual fee on group health plans that provide major medical coverage. The purpose of the fee is to fund a temporary reinsurance program for insurers in the individual market. The fee is imposed during 2014, 2015 and 2016.

For 2014 the fee was $63 per covered person. For 2015 the fee dropped to $44 per covered person. For 2016 the fee will be further reduced to $27 per covered person. (The reason for the decrease is that the goal for the revenue to be raised under the program was front-end loaded for 2014 and decreased in 2015 and was further reduced for 2016).

If an employer’s plan is fully-insured the fee is reported and paid by the insurer. If the employer’s plan is self-funded, the fee is imposed on the plan (i.e., the employer-plan sponsor). However, a third-party administrator may report and pay the fee on behalf of a self-funded plan. The fee sunsets after 2016.