The Transitional Reinsurance Fee, paid by insurers for insured medical plans and by plan sponsors of self-funded plans, was instituted by the ACA to help stabilize premiums for coverage in the individual health care market during the first three years of operation of the Public Exchanges (Marketplace).
Plan sponsors and issuers must submit covered life information for the applicable benefit year to HHS no later than November 15 of the benefit year or, if such date is not a business day, the next business day. HHS will send invoices based on this information, which may be paid by issuers and plan sponsor in two parts, or may be made as one payment.
For each year in the three-year period, HHS will issue an annual notice specifying the required reinsurance fee and the applicable reinsurance parameters (the coinsurance rate, the attachment point and the reinsurance cap). HHS announced that:
- The reinsurance fee was $63.00 per covered life for 2014; $44 per covered life for 2015; and $27 per covered life for 2016;
- Employers making two payments for the 2016 plan year will pay $21.60 payable in January 2017 and the remaining $5.40 payable in late 2017;
- 2016 is the final year for Transitional Reinsurance Fees; and
- Entities are required to keep records concerning these fees for ten years.