The Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) recently issued an update on the Transitional Reinsurance Fee (TRF) as follows:
A Transitional Reinsurance Fee (TRF) will be assessed on both insured and self-funded plans for the 2014, 2015, and 2016 calendar years to help cover some of the costs expected from covering formerly uninsured individuals in the marketplace. For 2014, this fee will be $63 per covered person. On Dec. 2, 2013, HHS published a proposed notice that recommends that employers have the option to pay this fee in two installments, with the reinsurance portion of the fee ($52.50) due in January 2015 and the treasury portion of the fee ($10.50) due late in the fourth quarter of 2015. The notice clarifies that unlike the Patient Centered Outcomes Research Institute (PCORI) fee, the TRF will only be assessed once per person, for which the entity that provides primary major medical coverage will be responsible. (If the plan provides secondary coverage for coordination of benefits purposes, the plan will not owe the TRF.) Major medical coverage would be defined as providing coverage for a broad range of medical services and meeting minimum value. If no one plan meets that standard, the plan that provides the most coverage for inpatient hospital services would be responsible for the fee.
The notice also says that it anticipates that for 2015 the TRF will be $44 per covered person, with $33 due in January 2016 and $11 due in late 2016 for the 2015 TRF. HHS is proposing that for 2015 and 2016, self-administered, self-funded plans would be exempt from the TRF. (Self-funded plans that use a third party administrator for claims or enrollment would still need to pay the fee. Even if this proposal is adopted, self-administered, self-funded plans will need to pay the fee for 2014.)
If you would like more information on the fees associated with Health Care Reform, please Contact Us.
