It’s Time to Plan ACA Reinsurance Payments

By Michael Berwanger, JD, Director, Quality Management & Compliance

 

shutterstock_68891791It is time for employer-sponsored health plans to begin thinking about the process for calculation and submission of enrollment data and payment of fees under the Transitional Reinsurance Program.

As background, this program was established to fund a reinsurance pool to help stabilize premiums in the insurance markets created under the Affordable Care Act (ACA).

The program is being funded by three annual assessments on employer-sponsored health plans. The assessments are for average covered lives in 2014, 2015 and 2016 calendar years.

This year, enrollment data must be submitted by November 15, 2016, and payment must be submitted no later than January 17, 2017.

The 2016 Reinsurance Contribution Rate is $27.00 per covered life.

Online Submission Process

The Centers for Medicare and Medicaid Services (CMS) has implemented a streamlined process for reinsurancethe collection of reinsurance contributions. A contributing entity, or a Third Party Administrator (TPA) on its behalf, can complete all required steps for the reinsurance contributions process online (using the government portal, pay.gov), including registration, submission of annual enrollment count, and remittance of contributions.

A form is available for the contributing entity (or its TPA) to provide basic company and contact information and the annual enrollment count for the applicable year. The form will automatically calculate the contribution amounts, and entities will be required to submit payment information and schedule a payment date for remittance of the contributions.

CMS will not send an invoice to contributing entities. All required action will be completed online at pay.gov.

Options for Payment

There are two options for how a contributing entity can make a payment: (1) a one-time lump sum payment, or (2) a full contribution in two payments. (See chart below.)

Contribution Payment Options for the 2016 Benefit Year

Reinsurance

Source: Centers for Medicare and Medicaid Services

CMS will permit contributing entities to submit each year’s contribution in two separate payments – one larger payment of $21.60 per covered life at the start of the year, and a smaller payment of $5.40 per covered life at the end of the year.

However, when submitting enrollment data, dates must immediately be scheduled for payment of the fees, whether there will be one payment prior to January 17, 2017, or two payments with the later in November 2017.

If You Are Self-funded for a Portion of the Reporting Period

health insurance noticesFor a plan that has moved from a fully insured plan to a self-funded plan during the first nine months of the 2016 calendar year, both plans will be responsible for paying a portion of the fee, using one of the permitted calculation methods.

Since fully-insured plans are not permitted to use the Snapshot Factor Method of calculation, either the Actual Count Method or the Snapshot Method of calculation must be used.

Helpful Resources

This site provides technical assistance and training related to the Marketplace and Premium Stabilization program (which includes the Transitional Reinsurance Program). Webinars are offered that provide entities with information on program and operational guidance, along with live demos of the enrollment count and contributions submission process.

This is the site where the contributing entity, or TPA, will create a profile, and submit the enrollment data and contributions for the Transitional Reinsurance Program.

This website is hosted by the Centers for Medicare and Medicaid to provide information about the Transitional Reinsurance Program.

For more information, consult your broker, legal advisor or cms.gov. MedCost

This blog post should not be considered as legal advice.

 

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Centers for Medicare & Medicaid Launches Employer Verification Study

By Michael Berwanger, JD, Director, Quality Management & Compliance

From April 2016 through June 2016, CMS will be contacting some employers, either by phone or letter, to request information about the Employer-Sponsored Coverage (ESC) offered to employees for the 2016 plan year.Employer health benefits, health care, employee claims

The purpose of this verification study is to evaluate whether an employee, or a sample of employees, receiving a premium subsidy for an exchange product correctly attested that he or she was not offered ESC that met affordability and minimum value requirements for plan year 2016.

While CMS has not articulated how large the sample size for the verification study will be, it is possible that some MedCost clients may be contacted. Employers will be asked to provide information regarding the lowest-cost self-only health plan that they offered for plan year 2016, as well as their employees’ eligibility for employer-sponsored coverage. If contacted by phone, calls are expected to last 10-15 minutes. Click here to view a sample of the 2016 Employer Notice letter you may receive.

CMS, employer verification studyThe study is taking place as part of efforts by HHS to meet certain “verification” requirements related to its administration of the ACA exchanges. The study is designed to help ensure that only individuals who do not otherwise have access to an “affordable/minimum value” plan outside the exchange receive subsidized coverage on the exchanges. Participation by employers in this study is voluntary.

For more detailed information regarding the Employer Verification Study, click here.