Robert Pear wrote a piece in The New York Times that has been widely carried by many news sources. He reported that insurance companies are seeking 20-40% rate increases in the public exchanges, saying the new customers are sicker than they expected. Of course, federal officials are pushing for lower increases. They could probably learn a lesson or two from employers who have become very skilled at negotiating with insurance companies over the years.
A few days before Pear’s article appeared, the Centers for Medicare and Medicaid Services disclosed a report on the revenue and pay outs from the first year of the Transitional Reinsurance Fee Program. Funding for this program comes from plan sponsors over a three-year period. In 2104, plan sponsors paid $63 per plan participant for an estimated $9.7 billion in first-year fees. That amount decreases to $44 per participant in 2015, and then to an estimated $27 in 2016. The program reimburses insurance companies participating in the public exchange for individual claims between a $45,000 attachment point up to a maximum of $250,000. The target reimbursement is 80% of the actual expense. However, the first-year claims experience is reported to have been better than expected and the program reimbursed 100% of the eligible claims in 2014, leaving a $1.7 billion surplus in the fund to be carried forward for the 2015 benefit year.
Hard to tell which players are making out the best here!
The transitional reinsurance fee deadline for submitting 2014 enrollment counts and scheduling payments is Friday, December 5. Originally slated for November 17, the delayed deadline gave contributing entities, including employers with self-insured health plans, almost three extra weeks to complete the online submission form. The 2015 payment deadlines remain on January 15 and November 15.
HHS has extended the transitional reinsurance fee deadline for submitting 2014 enrollment counts and scheduling payments to Friday, December 5. Originally slated for November 17, the delayed deadline gives contributing entities, including employers with self-insured health plans, almost three extra weeks to complete the online submission form. The 2015 payment deadlines of January 15 and November 15 deadlines remain the same.
As promised, the Federal Government delivered the Transitional Reinsurance Fee Form (2 pages) and instructions (64 pages). They are available at pay.gov. Employers must submit the member counts for self-insured plans by November 15, 2014 (regulators will extend to November 17 since the 15th is a Saturday). Remember, there are multiple options for how to determine member counts. Some carriers are providing reporting support, but don’t assume yours is -- you might need to ask for help. If your carrier is willing to provide member counts, be sure to review which method they are using and confirm if it is best approach for your population.
The IRS released the PCORI fee for policy/plan years ending on or after October 1, 2014 and before October 1, 2015. The notice is three pages long and you have to read to the end to find out the amount, so to save you some time, it’s $2.08. Fees are calculated per covered life, generally including covered dependents, retirees, and COBRA participants. In the first year that the fee was charged, the amount was $1.00.