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HHS proposal would exempt some health plans from ACA reinsurance fee

Posted On: Oct. 25, 2013 12:00 AM CST

HHS proposal would exempt some health plans from ACA reinsurance fee

Employers that self-insure and self-administer their health care plans would be partially exempted from a hefty health care reform law “reinsurance” fee under new rules the U.S. Department of Health and Human Services intends to propose.

In a filing that will be published in the Oct. 30 Federal Register, HHS said “certain self-insured, self-administered plans” would be exempt “from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years. Those employers, though, along with other health plan sponsors, would be required to pay the first-year fee for the program, which begins in 2014.

Earlier, regulators set the 2014 fee for the three-year Transitional Reinsurance Program at $63 per plan participant. Fee levels have not been set for 2015 and 2016.

The fees are intended to generate $25 billion over the three-year program. Revenues generated by the fee are to be used to help offset costs incurred by insurers covering high-cost individuals purchasing coverage in public insurance exchanges.

The fee has been criticized by business groups, who say employers, especially self-insured plans, will receive no direct benefit.

HHS did not disclose in its filing why it was proposing the exemption or why it would be limited to employers that self-insure and self-administer their health care plans.

While self-funding of health care benefits is widespread, few employers self-administer their health care plans.