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Heard about the ACA’s $63 per head reinsurance fee?

by on
in Employment Law

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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