August 29, 2012
Authored by: benefitsbclp
Employers sponsoring self-funded group health care plans are likely familiar with the Patient-Centered Outcomes Research Fees which will be imposed beginning in July 2014 as a result of the health care reform bill. The fees — $1 per covered life for the first year, and $2 per covered life thereafter — can add up for plans. These fees may be dwarfed, however, by another health care reform fee-the Transitional Reinsurance Fee.
What The Transitional Reinsurance Fee, which applies to both insured and self-funded group health plans, has been somewhat of a sleeper in benefits news. Although final regulations were issued March 23, 2012, the annual amount of this per capita fee is still unknown. However, preliminary projections indicate that the annual fee could be at least $60, and perhaps as high as $105, per covered life (covered employees and their dependents), making the Patient-Centered Outcomes Research Fee seem like a pittance.
Why The Transitional Reinsurance Fee is intended to stabilize premiums for high-risk individual health insurance policy-holders. Reinsurance payments will be distributed to health insurance issuers to offset high costs for covering high-risk populations. The program will operate from 2014 to 2016, with the first quarterly payments due January 15, 2014.
Who Insurers are responsible for the fees for insured individual and group health plans, whereas “third-party administrators” — not defined in the final regulations — must remit payments on behalf of self-funded group health plans and their sponsors, which will bear the financial responsibility for the Transitional