dg-aca-transitiona-reinsurance-blogBeginning in 2014 and continuing through 2016, employers and other sponsors of self-funded health plans, as well as insurance companies offering insured health plan products are subject to the Affordable Care Act’s transitional reinsurance fee.

This fee was designed to fund reinsurance payments to health insurance issuers to cover high-risk individuals in the individual market. The transitional reinsurance payments are intended to stabilize insurance premiums in the individual market during 2014, 2015 and 2016 as consumers and insurers become more comfortable with the state health insurance exchanges.

Although all contributing entities are responsible for the reinsurance contribution, they may use a TPA contractor to support the reinsurance contribution process.

How Does a Contributing Entity Make Reinsurance Contributions?

Contributing entities (or TPAs on their behalf) are required to register on Pay.gov in order to complete the contribution process. Using Pay.gov, the contributing entity will access the “2016 Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form” to enter the annual enrollment count. Additionally, contributing entities will schedule payment for calculated reinsurance contributions on the payment page.

The 2016 Transitional Reinsurance Form and schedule reinsurance contribution payment(s) must be submitted no later than November 15, 2016.

Payment Options:
The 2016 Reinsurance Contribution Rate is $27.00 per covered life. Contributions can be made:

  • In one lump sum of $27 per covered life
  • In a two-part payment of $21.60 per covered life (first payment) and $5.40 per covered life
(second payment)

Helping Diversified Group Clients Comply

If your health benefits plan is administered by Diversified Group, you have been informed of these requirements AND the steps we can take to help your plan comply. As your full-service TPA, Diversified Group is able to complete the 2016 Transitional Reinsurance Form on your behalf; calculate your average number of covered lives and schedule the submission of your required payment(s). Contact your Diversified Group representative for pricing and answers to any questions you have relating to the transitional reinsurance fee or other ACA related compliance requirements.