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October 28, 2014

HRB 103 - Completing the Transitional Reinsurance Fee Form (Revised)

Released October 28, 2014, Revised November 21, 2014 I Download as a PDF

HRB 103 - Completing the Transitional Reinsurance Fee Form

HRB 103 - Completing the Transitional Reinsurance Fee Form

On October 24, 2014, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) released the official form, together with a user manual, for submitting enrollment counts and setting up payment for the transitional reinsurance fee. 

 

As background, the Affordable Care Act (ACA) imposes a transitional reinsurance fee, the goal of which is to help stabilize premiums in the individual market due to enrollment of higher risk individuals in the marketplace beginning in 2014.  All insurers and plan sponsors of self-funded plans are required to contribute to this reinsurance fund over a three year period from 2014 through 2016.

 

The entities responsible for submitting the relevant information and paying the fees are insurers of fully insured plans and plan sponsors of self-funded plans (though, third party administrators can facilitate the process on behalf of plan sponsors), referred to as “reporting entities”.  The reporting and payment of fees is based on the type of plan issued by the insurer or plan sponsor.  Virtually all-sized health plans, such as major medical plans and high deductible health plans used in conjunction with a health savings account (HSA), are subject to these fees.  This includes plans sponsored by single employers, as well as multiple employer plans and multi-employer plans.  Post-employment plans that are primary to Medicare, such as early retiree plans and COBRA continuation coverage are also subject to the fee.  Plans not subject to fees include:

  • HIPAA-excepted benefit plans such as limited scope dental and vision plans;
  • Health reimbursement arrangements integrated with comprehensive insured or self-funded group coverage;
  • Flexible medical spending account plans;
  • HSA investment accounts;
  • Employee assistance plans, disease management programs, and wellness programs if the program does not provide significant benefits in the nature of medical care or treatment;
  • Stand-alone prescription drug plans;
  • TRICARE or other military benefit plans;
  • Certain Indian tribal benefit programs; and
  • Certain expatriate plans.

Steps in Completing the Form

The reporting form, known as the “ACA Transitional Reinsurance Program Annual Enrollment Contributions Submission Form and payment process is accomplished through the Pay.gov website (https://www.pay.gov).  According to CCIIO’s companion User Manual, following are steps to follow for in the contribution submission process.

 

Prior to registering in the Pay.gov website, reporting entities should review the actual form and instructions.  Information that should be prepared prior to registration includes the collection of data, a calculation of the entity’s annual enrollment count, and preparation of supporting documentation (see Section 4.2 of the Manual, Collection of Required Information for Filing). 

 

Step 1. Register with Pay.gov (https://www.pay.gov/) Entities that do not already have an account with pay.gov must register and create an account for purposes of completing the contribution form, uploading support documentation and providing payment information (see Section 5 of the Manual for registration tips).  The registration information used to create user profile and pre-populate certain information on the form. 

 

Step 2. Complete the “ACA Transitional Reinsurance Program Annual Enrollment Contributions Submission Form”.  Section 6 of the manual provides the details about the required information to complete this form including the reporting entity’s contact information, selection of the type of payment and benefit year, uploading support documentation of the entity’s gross annual enrollment count, and scheduling the contribution payment. 

Step 3. Upload Supporting Documentation.  The form requires detailed information about the reporting entity’s enrollment count in a specific format (refer to Appendix D, Supporting Documentation on pages 51-56 of the Manual for required elements and format specifications).  Below is a snapshot of the methodologies that can be used to count covered lives by type of reporting entity:

 

 

Methodology for Counting Covered Lives

Insured Group Health Plan

Self-Funded Group Health Plan

Actual Count

Add the total number of covered individuals on each day of the first 9 months of the benefit year and divide that total by the number of days in the first 9 months

×

×

Snapshot Count

Add the total number of covered individuals on any date during the same corresponding month in each of the first three quarters of the benefit year, and divide that total by the number of dates on which a count was made.

 

×

 

×

Snapshot Factor

Add total number of covered lives of reinsurance contribution enrollees on any date during same corresponding month in each of the first three quarters of the calendar year, i.e., March, June and September, and dividing that total by the number of dates on which a count was made.

 

×

Member Months or State Form

Multiply the average number of all policies offered by the insurer in effect for the first 9 months of the benefit year by the ratio of covered individuals per policy in effect. The calculation is derived by data the insurer annually files with its relevant state licensure department, such as a state insurance department.

 

×

Form 5500

Based on average number of covered participants at the beginning and end of the plan year, as reported on the relevant Form 5500 for the applicable plan year

 

×

 

Step 4 – Enter payment information.  Information provided by the reporting entity by this point of the form will result in an automatic calculation of the fees due.  The reporting entity then needs to schedule its payment, and provide electronic banking transaction information to pay the fees (see section 6.7 and 6.8 of the Manual).   Reporting entities can set up to pay the fee in one or two installments.  The first collection deadline is January 15, 2015; the second collection deadline is November 15, 2015.  Or, the entity can choose to pay both installments at once by January 15, 2015.

 

Key Deadlines for 2014 Benefit Plan Year Reporting

Dec. 5, 2014*

Submit Annual Enrollment Count and Schedule Contribution Payment Date(s)

 

Jan. 15, 2015

Remit first (or combined) Contribution Amount: $52.50 per covered life**

 

Nov. 15, 2015

Remit second Contribution Amount: $10.50 per covered life**

 

*The initial November 15, 2014 deadline had been extended to November 17, 2014.  On November 15, CMS further extended the deadline for submission to December 5, 2014.

**For purposes of 2015 benefit year reporting, the first or combined contribution rate reduces from $52.50 to $33 per covered life; the second contribution amount increases from $10.50 to $11 per covered life.

 

 

Resources for Additional Information

Background CBIZ Health Reform Bulletins

About the Author:  Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc.  She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law.  Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

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