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Monday, 12 October 2015 18:00

Reinsurance Fee Reporting Deadline November 16, 2015

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2015 Reinsurance Fees are due soon for partially self-funded plans.  These fees began in 2014, and were created by the ACA to stabilize the individual insurance markets for three years after the elimination of medical underwriting. The fee is $44 per average covered life (both employees and dependents) on the health plan in 2015. The fee was $63 last year and will be $27 in 2016, the final year of the program.

Partially self-funded plans need to take action soon by reporting their average number of covered lives for the first 9 months of 2015 to The Department of Health and Human Services (HHS) by the deadline of November 16th, 2015.  Some third-party administrators will provide assistance, at least with tallying the membership, but the self-funded groups themselves are ultimately responsible for reporting their enrollment counts and paying their fees.

HHS has outlined several methodologies for counting the average number of covered lives:

  • Actual Count: Count the total covered lives for each day of the plan year and divide by the number of days in the plan year.
  • Snapshot Dates: Count the total number of covered lives on a single day in a quarter (or more than one day) and divide the total by the number of dates on which a count was made. The date or dates must be consistent for each quarter. We expect this to be the most common method.
  • Snapshot Factor: In the case of two tiered coverage, determine the sum of: (1) the number of participants with self-only coverage, and (2) the number of participants with other than self-only coverage multiplied by 2.35, then use the Snapshot Date method as above.
  • Form 5500 Method (for those with 100+ participants):  Assuming the coverage allows for dependents to enroll, the average number of total lives is the sum of total participants covered at the beginning and the end of the plan year, as reported on the Form 5500.

Whichever method they choose, self-funded plans need to upload their covered lives data into www.Pay.gov, and submit the form by November 16, 2015.  No fee payment is due on this date.  You can either pay the fee in one installment on January 15th of $44 per covered life, or pay 5/6 of it on that day and the remainder on 11/15/16.  Most employers will simply pay it all in January and get it over with.

Here’s a recap of the payment schedules and deadlines:

2015 payment schedule:

  • Nov 16, 2015 – Membership counts due to HHS via pay.gov
  • Jan 15, 2016 – Due date for making full or partial payment.  Please note if you plan to pay early, payment cannot be made within 30 days of membership submission to pay.gov.
  • Nov 15, 2016 – Due date for making the second installment, if paying in two installments.  This is also expected to be the reporting deadline for the 2016 enrollment, and the cycle starts all over.

For Fully Insured plans, the Reinsurance Fee is already being calculated in your premium.  There is nothing further you need to do. Health Reimbursement Arrangements, a type of self-funded plan that does have to report and pay PCORI fees each July, are NOT subject to this reinsurance fee.

If you have any questions, see the Frequently Asked Questions at https://www.pay.gov/WebHelp/HTML/payments_frequently.html, or justThis email address is being protected from spambots. You need JavaScript enabled to view it.

Read 4924 times Last modified on Monday, 14 September 2020 20:05
Kristen Russell

Kristen founded Fall River Employee Benefits as the culmination of her insurance industry career as an actuary, underwriting executive & consultant. As an Assistant Vice President at Great-West Healthcare (now part of CIGNA), she managed a $1 Billion block of health insurance. She also worked as a Senior Consultant at Reden & Anders, consulting to insurance companies and large employers throughout the country. Ms. Russell received a Bachelor of Science, Business Administration in Actuarial Science, is a member of the American Academy of Actuaries and achieved Fellowship in the Society of Actuaries through a rigorous nine-year series of exams.

Kristen grew up in Iowa but has lived in Colorado since 1993, currently living near our office in the Lower Highlands neighborhood near downtown Denver.  She enjoys bicycling, hiking, traveling and has a special passion for non-profit volunteering. She is married to an incredibly talented photojournalist, has two adult stepdaughters and an adorable Border Collie/Lab mix named Chaco.