October 20, 2014

As a reminder, employers with self-insured major medical plans must report their membership count to the U.S. Department of Health and Human Services via the pay.gov website by November 15, 2014, as part of the Affordable Care Act’s (ACA) transitional reinsurance fee (TRF).

By way of background, for the 2014-2016 calendar years (irrespective of plan year), the ACA assesses a fee on both insured and self-insured plans. All carriers and self-insured group health plans are required to make contributions under the TRF program to support payments to individual market issuers that cover high-cost individuals.

The following bullet points summarize a plan sponsor’s obligation under the TRF:

• Employers with self-insured plans must report their annual enrollment of covered lives for reinsurance purposes to HHS via the pay.gov website by November 15 of each year (starting with November 15, 2014).
  • Payments will be remitted on the pay.gov website
• The fee is $5.25 per member per month (PMPM) in 2014.
  • Various counting methodologies are available. See https://www.regtap.info/uploads/library/RI_CountMethodEx_5CR_072114.pdf for examples of permitted counting methods.
• Once the enrollment information is reported, HHS will notify the plan of the fee (generally by December of that year) and, in the fourth quarter of the following year, will notify the plan of the portion of the fee that will be allocated to the Treasury.
  • Plans may have the option to pay their entire fee with the first installment, rather than making the Treasury payment later.
  • Employers remitting the TRF may need to contact their bank to add Agency Location Code (ALC+2 value) 7505008015 to its list of approved companies for ACH automatic debits.
• The fee does not apply to coverage that does not constitute major medical coverage.
  • Thus, HRAs, HSAs, FSAs, employee assistance programs (EAPs), certain wellness programs and prescription drug-only plans, as well as plans that do not provide “minimum value” are excluded. In addition, post-65 retiree medical coverage and certain self-insured plans offering limited benefits such as dental and vision are excluded.
• HHS has proposed to exempt certain self-insured, self-administered plans from the fee for 2015 and 2016. Such plans that do not use a TPA in connection with claims processing or adjudication (including managing appeals) or for plan enrollment will not be subject to the fee.
• Third party administrators (TPAs) may, but are not required to, complete the reinsurance contribution process, including payment, on behalf of a self-funded plan.
• For plans that are partially insured and partially self-insured (e.g., where medical benefits are provided under a self-insured arrangement but prescription drug benefits are provided under an insured arrangement), the carrier is not responsible for the TRF if it does not provide “major medical coverage.”
• When an employer changes funding mechanisms from fully insured to self-insured (or vice-versa) in during the calendar year, the carrier is responsible for paying the TRF for the portion of the calendar year during which the plan is fully insured, and the plan sponsor is responsible for paying the TRF for the portion of the year during which the plan is self-insured.
• As of the time of this advisory (October 20, 2014), the TRF submission form is not currently available. The pay.gov website indicates that the Form will be available in time for the November 15, 2014 deadline to submit the annual enrollment count
  •  When the Form becomes available, a notice will be sent to REGTAP registrants.
  •  Employers may visit https://www.REGTAP.info to register.

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