Section 1341 of the Patient Protection and Affordable Care Act (“ACA”) created a temporary Reinsurance Program to help stabilize premiums for individual healthcare coverage.

How long will the temporary Reinsurance Program last?
The program will be in effect for three years, 2014 through 2016.

What entities will be responsible for funding the temporary Reinsurance Program?
The Reinsurance Program will be funded by fees assessed on all issuers of fully insured healthcare coverage and on all self-funded group health plans. This fee is called the Transitional Reinsurance Fee (Fee). Any entity that must pay the Fee is referred to as a “Contributing Entity.”

How much is the Transitional Reinsurance Fee?
For the entire duration of the Reinsurance Program, the total that must be collected nationally is $25 billion; $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. For 2014, the Fee will be $63 per covered life. In 2015, the Fee will be $44 per covered life. The amount of the Fee in 2016 has not been announced yet.

How do I determine the number of “covered lives” in my Group Health Plan?
The Centers for Medicare & Medicaid Services (CMS) has provided several acceptable methods which a Group Health Plan can use to count its covered lives. They are:

• Actual Count Method: Add the number of enrollees for each day of the month for the first nine months of the calendar year and divide that total by the number of days in those nine months of the calendar year.
• Snapshot Count Method: Add the number of enrollees on any date (or dates) during the same corresponding months in each of the first three quarters of the calendar year and divide by the number of dates on which a count was made. For example: Add the January 10, April 10, and July 10 enrollment counts and divide by three. Or, add the enrollment dates on the first of each month from January through September and divide by nine.
• Snapshot Factor Method: Similar to the Snapshot Count Method. Add the number of lives on any date (or dates) during the same corresponding months in each of the first three quarters of the calendar year and divide by the number of dates on which a count was made. However, you calculate the number of lives on each date differently. Add the following two numbers:
  • the number of participants with self-only coverage on that date, and
  • the number of participants with other than self-only coverage multiplied by 2.35
• Form 5500 Method: Use the most recently filed Form 5500 to determine the number of covered lives. To calculate the number of covered lives:
  • For plans that offer self-only coverage: add the total participants covered at the beginning and end of the reporting year and divide by two.
  • For plans that offer self-only and other than self-only coverage: add the total participants covered at the beginning and end of the reporting year.
• CMS has provided detailed explanations and examples of the various counting methods at https://www.regtap.info/uploads/library/RI_CountMethodEx_5CR_072114.pdf.

Most of the methods you have described above only count enrollees during the first nine months of the year. Why is that?
CMS has determined that it will count only during the first nine months of the year because of when the annual enrollment count for the Fee is due.

Will Health New England do this reporting for my plan?
As we did for the PCORI fees, Health New England will provide our self-funded employer groups with an enrollment report for the Fee using the counting method that your plan selects.

My group health plan uses more than one carrier to provide major medical benefits. Must I use the same counting method with all carriers?
Yes. CMS requires that you use a single counting method in a specific year to determine your annual enrollment count. You are not required to use the same method in all three years of the program, however.

When is the annual enrollment count for the Fee due?
For 2014, you must submit your plan’s annual enrollment count no later than November 15, 2014.

How do I report my annual enrollment count?
The annual enrollment count and the Fee payment(s) will be processed through www.pay.gov, a federal website that is used to make electronic payments to federal government agencies.

My company has a pay.gov account. Do I need to create a new account for purposes of reporting and paying the Fee?
No. If you already have a pay.gov account, you can use the same account to report your annual enrollment count and pay the Fee.

My company is not registered on pay.gov. Do I have to wait until I have my annual enrollment count ready before registering?
No, you can register your company at any time. In fact, CMS is encouraging Contributing Entities to register and create their accounts now.

Should I pay the Fee at the time that I report my annual enrollment count?
No. CMS wants Contributing Entities to schedule payment at least 30 days after reporting their annual enrollment counts to allow CMS to verify the information that you have entered via the ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form (the Submission Form).

How will CMS verify the information that I enter on the Submission Form?
At the same time that you complete the Submission Form, you will be required to provide supporting documentation in a .CSV file format. You can find the information on the specific file layout at https://www.regtap.info/uploads/library/RIC_FileLayoutJobAid_081114_v2_5CR_081314.pdf.

Does the Fee have to be paid all at once?
No. The Fee can be paid in two installments. You can, however, pay the Fee in one installment if you prefer to do so.

When is the Fee for 2014 due?
If you are paying the Fee in a single installment, payment must be made no later than January 15, 2015. If you are paying the Fee in two installments, the first installment is due no later than January 15, 2015, and the second installment is due no later than November 15, 2015.

Can I decide how I want to split up the Fee if I pay in two installments?
No. If you choose to pay in two installments for 2014, you must pay $52.50 per covered life no later than January 15, 2015, with the remaining $10.50 per covered life due no later than November 15, 2015.

How do I submit the payment(s)?
Payments will be submitted through pay.gov. CMS is requiring that your payment(s) be scheduled at the time you submit the Submission Form. You will not be able to submit the Submission Form unless you complete the payment information, which includes scheduling a date for the payment.

What forms of payment will be acceptable on pay.gov?
At this time, the only acceptable form of payment is an ACH debit to a bank account.

Looking for more information? Here are links to three presentations that CMS has prepared on the process it has created for reporting and payment of the Fee:
https://www.regtap.info/uploads/library/RI_EntitiesandCounting_071414_5CR_072114.pdf

https://www.regtap.info/uploads/library/RI_EnrollmentContributions_072814_5CR_072814_v1.pdf

https://www.regtap.info/uploads/library/RIC_SubmissionSupportingDoc_081114_v1_5CR_081314_(2).pdf

This summary is provided for informational purposes only and is not intended to be legal advice. Health New England strongly urges any employers who might be affected by these provisions of the ACA to consult with their own legal advisors.