On May 22, 2014, CMS issued a one-page letter that explains the process by which a group health plan (“contributing entity”) will actually pay reinsurance fees it owes. For 2014, the annual fee is $63 per enrollee (this includes enrolled employees and dependents), and it applies to all insured and self-funded “major medical” plans. The bulk of the 2014 fees ($52.50 per enrollee) will be due in mid-January 2015, and the balance ($10.50) will be due by November 15, 2015.
The New “One-Stop” Process on Pay.gov
According to the May 22nd letter, HHS will use Pay.gov. to implement a “one-stop” streamlined process for collecting reinsurance contributions. A group health plan—or a third-party administrator (TPA) acting on the plan’s behalf—can log on to www.Pay.gov and complete all required steps in the payment process:
- submission of the annual enrollment count, and
- remittance of the reinsurance contributions.
At Pay.gov there will be a form on which the group health plan or TPA will provide basic company and contact information and the annual enrollment count for the benefit year no later than November 15th. The form will automatically calculate the reinsurance contribution amount due. The plan or TPA also must submit payment information and schedule a payment date for remittance of the contributions.
The new streamlined approach continues the November 15th deadline provided in prior guidance issued by HHS, but replaces those provisions in prior guidance that said HHS would bill plans by December 15th, and plans would be required to pay the bills within 30 day after receiving them (by approximately January 15, 2015).
HHS plans to offer training on this process beginning in late June. Interested parties can register at https://www.regtap.info/ to receive notices regarding upcoming trainings.
Background on Reinsurance Contributions
As background, the reinsurance contributions collected from group health plans will be paid to insurers who offer individual policies on the Exchanges/Marketplaces and who end up paying claims in excess of a specified attachment point (that is, insurers who end up covering more than their share of high-claims individuals). The purpose of the reinsurance fee is to help stabilize premiums for coverage in the individual market during the first three years the individual Exchanges are in operation.
For additional background information on the Transitional Reinsurance Fee, see the HealthReformUpdates.com article at https://news.leavitt.com/health-care-reform/transitional-reinsurance-fees-january-2014-update/