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ACA fee to reimburse health insurers expected to near goal

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A health care reform law-created program that imposes a fee on self-funded employers and other health plan sponsors is expected to generate roughly enough revenue to partially reimburse insurers covering those with high health care costs in the individual market, federal regulators say.

The Department of Health and Human Services disclosed late last week that it has collected $5.5 billion from health plan sponsors paying the Transitional Reinsurance Program fee.

In addition, HHS said it expects to collect roughly another $1 billion on or before Nov. 15, the last day payments can be made for the first year of the program. But insurers will see only half of that, with the other half going to the U.S. Treasury Department.

In addition, HHS said it has about $1.7 billion in unused fees collected during the 2014 benefit year that will be available for the 2015 benefit year. That $7.7 billion is just under the $8 billion that is supposed to be available in the program's second year to reimburse insurers.

For the 2014 benefit plan year, the fee was $63 per plan participant; for 2015, $44. The 2016 fee, which under the Patient Protection and Affordable Care Act is to generate $5 billion in revenue, is $27 per plan participant.

During the first year of the three-year program, health insurers writing coverage in the individual market were reimbursed by the government for 2014 claims between a $45,000 attachment point and a $250,000 ceiling.

The biggest payment — $549 million — went to Blue Cross Blue Shield of Texas; followed by Anthem Blue Cross of California, $401.1 million; and Blue Shield of California, $363 million.

The final 2015 reinsurance coverage limits and the payments that will be made to insurers will be announced at the end of June, HHS said.

The reinsurance program is intended to encourage health insurers to provide coverage in the individual market by partially reimbursing them for claims they pay that fall between certain amounts.