HHS Signals Plan To Offer Some Exemptions to Reinsurance Fee
The Obama administration has signaled that it intends to exempt some health plans offered by labor unions and businesses from paying two of the Affordable Care Act's three-year reinsurance fees, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 11/6).
Under the ACA, insurers are required to pay a tax per enrollee to help offset the cost for insurers that end up having large medical bills for new customers who purchase coverage on the health insurance exchanges. The levy is expected to raise a total of $25 billion over three years (Radnofsky/Trottman, Wall Street Journal, 11/6). The fee starts at $63 in 2014 and will decrease to $42 in 2015 and $26 in 2016 (Hancock, "Wonkblog," Washington Post, 11/6).
The disclosure about the exemption was included in HHS rules released last week that said the department intends "to propose in future rulemaking to exempt self-insured, self-administered plans from the requirement to make reinsurance contributions in 2015 and 2016." Policies that would qualify for exemption include multi-employer health plans, known as Taft-Hartley plans, which the Obama administration in September said are ineligible to receive federal subsidies available on the exchanges ("Healthwatch," The Hill, 11/6).
According to the AP/Sacramento Bee, HHS said it would consider comments from interested parties after the rule is released (Hananel, AP/Sacramento Bee, 11/7).
Labor Unions, Businesses Seek Larger Exemption
Labor unions and businesses did not welcome the news, noting that many of their plans would not qualify for the exemption, the Journal reports.
Moreover, the twin requirements that plans be self-insured and self-administered could exclude many organizations.
Large employers and labor unions typically self-insure, meaning they assume the risk of medical costs incurred by participants. However, several labor unions -- including AFL-CIO, Laborers' International Union of North America and the International Brotherhood of Electrical Workers -- said most of their health plans use third parties to administer those plans and therefore would not qualify for the self-administered requirement.
Maria Ghazal, vice president and counsel of health policy for the Business Roundtable, said, "For the most part, most companies use a third-party administrator" and would not qualify for the exemption (Wall Street Journal, 11/6).
The groups also argue that the exemption does not go far enough because qualifying union and business plans would still have to pay the 2014 fee, which is the largest of three ("Wonkblog," Washington Post, 11/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.