The Affordable Care Act requires health insurance issuers and self-insured group health plans to pay a transitional reinsurance fee in 2014, 2015 and 2016. The deadline to pay the second installment of 2015 fees and the deadline to submit the enrollment count for 2016 is November 15, 2106. No fee is required in 2017 or later.
For 2016, the transitional reinsurance fee is $27 per covered life. Payment can be made in full by January 17, 2017 or in two installments- the first ($21.60) by January 17, 2017 and the second ($5.40) by November 15, 2017.
Insurers will pay the fee for fully-insured plans, but plan sponsors will have to pay the fee for self-funded plans.
The fee is due on major medical plans. It does not have to be paid on stand-alone dental or vision plans, retiree medical plans that pay secondary to Medicare, health reimbursement arrangements, health savings accounts or flexible spending accounts.
For 2016, entities must submit their enrollment count through https://pay.gov/public/home using the “2016 ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form.” The count must be provided no later than Tuesday, November 15, 2016. The website will calculate the amount owed based on identified enrollees.
The number of covered lives on which the fee is due can be calculated using one of the following methods:
- Form 5500 Method. Participant count on most recently filed Form 5500 (beginning of plan year plus end of plan year).
- Actual Count Method. Adding total number of all covered lives for each day of first 9 months of calendar year, divided by days in first nine months.
- Snapshot Count Method. Adding the total number of covered lives on any date during same corresponding month in each of the first three quarters of the benefit year and dividing that total by number of dates on which a count was made. The dates used for the second and third quarters must fall within the same week of the quarter as the corresponding dates used for the first quarter.
- Snapshot Factor Method. Adding the total number of covered lives on any date during first three quarters, divided by number of dates on which count was made.
Employers with self-funded plans should prepare for the transitional reinsurance fee, which could be costly for those with high plan participation.
