Transitional Reinsurance Fees To Begin in 2014

March 11, 2014
2 min read

One of the components of the ACA that will come into play this calendar year is the transitional reinsurance program. The purpose of the program is to help stabilize premiums for coverage in the individual market from 2014 through 2016. In brief, the program provides for collection of $25 billion in fees from health insurers and self-insured group health plans over the course of those three years. The funds will then be used to reimburse insurers issuing policies through the insurance exchanges that cover a disproportionate level of high-cost individuals.
The annual Reinsurance Assessment Fee breaks down as follows:

  • The 2014 fee is $63 per covered life, with scheduled collection in two installments: $52.50 in January, 2015, and $10.50 in the fourth quarter of 2015.
  • The 2015 fee is confirmed at $44 per person.
  • The fee for 2016 has not yet been announced.

In contrast to the comparative effectiveness fee payment rules, third-party administrators may make the transitional reinsurance fee payments on behalf of a self-insured plan. Also in contrast to the comparative effectiveness fee payment rules, the transitional reinsurance fees may be paid from plan assets, including Trust assets.
If you have questions regarding the payment calculation methodology of this fee, feel free to contact us, or 1.800.250.2741.

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