Preparing for the Transitional Reinsurance Program

Starting in 2014 and continuing into 2016, Section 1341 of the Affordable Care Act sets up a Transitional Reinsurance Program that aims to help stabilize premiums in the individual market during this three-year period. To accomplish this, the program requires that certain health insurance issuers and self-insured group heath plans make contributions to cover the expense of high-cost individuals enrolled in non-grandfathered individual market plans. These contributions are also used to pay for the administrative costs of operating the reinsurance program and the General Fund of the U.S. Treasury for these three benefit years.

The cost to each contributing entity for the 2014 benefit year is $63.00 per covered life. While there are multiple methods of calculating your total number of covered lives, BPA utilizes the Snapshot Count. With this method, you simply count your total number of covered lives on a single day in each quarter (or more than one day) and then divide the total by the number of dates on which a count was made. Note though that the dates must be consistent for each quarter and the reinsurance fee only looks at the first three quarters (i.e., first nine months) of the 2014 calendar year. Once determined, your total number of covered lives for 2014 must be submitted to Pay.gov by November 15, 2014. After you submit your 2014 annual enrollment count, HHS will notify you of your reinsurance fee due; payment must made within 30 days of this notification.

Paying this contribution is done through Pay.gov, with two payment options available to you:

1.) One payment for the entire 2014 benefit year no later than January 15, 2015, reflecting $63.00/covered life, OR

2.) Two payments for the 2014 benefit year, with the first payment due by January 15, 2015, reflecting $52.50/covered life, and the second payment due by November 15, 2015, reflecting $10.50/covered life.

Although this entire process may seem time consuming, BPA can handle most of it for you. We can help you determine your contribution owed and then submit the payment on your behalf. For more information on how BPA can help you with this program, look for further communication from BPA soon.