Q&A: Employers face new fees under health care reform

Brandon Long, an employee benefits attorney with McAfee & Taft, talks about the transitional reinsurance program under health care reform.
by Paula Burkes Published: February 21, 2013
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Q&A with Brandon Long

Employers will face new fees in health care reform program

Q: I understand health care reform requires certain reinsurance payments from health insurance issuers and self-insured medical plans. Can you explain?

A: Yes. The Affordable Care Act established a three-year transitional reinsurance program from 2014 to 2016. This program is funded by contributions from health insurance issuers and self-insured group health plans, including employer health plans. According to proposed rules that were issued a few months ago, the Department of Health and Human Services (HHS) currently estimates the fee will be $63 times the number of covered lives, or $63,000 for an employer with a self-insured medical plan with 1,000 covered lives. Additional fees will be due for 2015 and 2016.

Q: What is the purpose of the reinsurance program and the reinsurance fee?

A: Premium tax credits and other insurance reforms effective next year are expected to increase the number of individuals with health insurance coverage, particularly in the individual market. Health care reform created certain premium stabilization programs, including the transitional reinsurance program to help offset the risk associated with these new and previously uninsured enrollees.

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by Paula Burkes
Reporter
A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and telecommunications institutions in Tulsa, Oklahoma...
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