You’re not alone if you said, “No!” It’s news to many benefits administrators. Tucked into the Affordable Care Act’s fine print is a requirement for most group health plans that provide major medical coverage to pay a reinsurance fee to the Department of Health and Human Services in 2014, 2015 and 2016.
At $5.25 per month for each “covered life,” the fee adds up to $63 per insured per year. The fees, which are collected by self-insured plans and insurers of group plans, are intended to spread risk, stabilize premiums and ensure stability in the group market.
Insurers or third-party administrators (TPAs) may pass the fee along to the plan, but the regs note that employers can negotiate the fee with their insurers. For ERISA-covered plans, the fees are a permissible plan expense. Find the (voluminous) details in the Federal Register, Vol. 78, No. 47—and discuss the logistics with your broker or TPA.
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