Employers that sponsor self-insured group health plans that provide major medical coverage are required to pay a transitional reinsurance fee to help stabilize premiums for coverage in the individual insurance market for 2014, 2015 and 2016. The 2014 fee is $63 per covered life, and the fee for 2014 (or the first installment of the fee, if the sponsor elects to pay in two installments) is due on January 15, 2015.
On or before November 15, 2014, self-insured group health plans that provide major medical coverage must provide an enrollment count to the Department of Health and Human Services. In late October of this year, the Centers for Medicare & Medicaid Services (CMS) released the form that plan sponsors of self-funded plans must use to report the number of persons enrolled in their health plan. Employers with self-funded major medical plans must fill out the form and establish an account through https://pay.gov/public/home and submit their covered life count through that account no later than November 15, 2014.
CMS released a manual to help employers in making the registration for the 2014 transitional reinsurance fee. The manual provides instructions for completing the CMS form and submitting the appropriate supporting documentation. The manual is available at http://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/The-Transitional-Reinsurance-Program/Downloads/RIC_FormManual_102014_v1.pdf.
The fee generally only applies for major medical coverage for active and retired employees. Stand-alone dental and vision plans, healthcare FSAs, and employee assistance programs typically do not have to pay it.
The methods available to count lives are similar to those used to count lives for the Patient Centered Outcomes Research Institute (PCORI) fee. However, the transitional reinsurance fee is calculated on a calendar year basis, and for 2014, employers should count participants enrolled in the plan during the first nine months of 2014.
Please note that CMS will only permit employers to pay the transitional reinsurance fee by Automated Clearing House (ACH) payment. ACH payments must be set up through the on-line account established by the employer.