Count plan enrollees only once for health care reform law fee: Industry group

WASHINGTON—An employer benefits lobbying group has asked the Internal Revenue Service to allow employers to “aggregate” their health care plans in calculating a fee mandated by the health care reform law.

That fee—to be used to fund research on medical outcomes—will be $1 per plan participant for the first plan year ending after Sept. 30, 2012, and $2 per participant in succeeding years.

For plan years starting after Sept. 30, 2014, the fee will be indexed to reflect the percentage increase in national medical expenditures as published by the Department of Health and Human Services.

Under the law, the total amount owed by an employer is calculated by multiplying the fee by the number of lives covered under a health care plan during the policy or plan year.

The Washington-based ERISA Industry Committee says such an approach in some situations could result in enrollees being counted twice, increasing how much employers would owe.

Take a situation in which an employee marries during the plan year and moves, for example, from a high-deductible plan to a low-deductible plan. “The individual should be counted only once,” according to a letter the organization sent Tuesday to the IRS that was signed by Mark Ugoretz, its president, and Gretchen Young, its senior vp-health care policy.

To prevent such double-counting, the organization asked the IRS to adopt a rule in which employers could aggregate their plans “in order to avoid paying duplicate fees for the same individual.”

In addition, the organization said the IRS should make clear that health reimbursement arrangements and employee assistance plans are exempt from the fee. “Although these arrangements are considered group health plans for some purposes, they provide very limited benefits,” the group said.

Earlier, Infinisource Inc., a Coldwater, Mich.-based health plan administrator, also called for an HRA exemption.

“We do not see any mention of HRAs in the legislative history” of the health care reform law, “nor do we see any congressional intent to include HRAs among the plans subject to the” fee, the administrator wrote in its letter to the IRS.