ERIC News Release
The ERISA Industry Committee (ERIC) today submitted comments to the Department of Health and Human Services (HHS) urging the agency to ensure that the method for computing the transitional reinsurance fee under the Affordable Care Act (ACA) not impose unnecessary administrative burdens or costs on employers, and that the fee be applied on a fair and impartial basis.
HHS has consistently interpreted the ACA to provide that the reinsurance fee applies to health insurance issuers and self-insured group health plans, but it is now proposing to exempt self-insured, self-administered group health plans from the reinsurance fee obligation for 2015 and 2016.
“The proposed change is particularly unfair as it favors a particular sub-group of plans at the expense of other plans, which now must bear the burden of the reinsurance fee that HHS has shifted to them,” ERIC President Scott Macey and Senior Vice President for Health Policy Gretchen Young wrote.
ERIC’s letter contends that there is no indication that Congress intended to exempt self-insured, self-administered plans from the category of plans subject to the fee, nor is there any other obvious reason why this particular subset of self-insured plans is more worthy of an exemption from the fee than any other group of self-insured plans. ERIC further recommends that if the definition of those self-funded plans subject to the fee is to be changed, then detailed information about the impact of any re-calculation of the reinsurance fee should be provided to the regulated community.
Among ERIC’s other recommendations is that amounts to be collected from plans for the reinsurance fee should be offset by any excess contributions from prior years. If plans have paid reinsurance fees for 2014 or 2015 in excess of the amount requested by issuers in accordance with the prescribed formula, ERIC urges HHS to provide that the amount to be collected from plans in 2015 or 2016, respectively, be correspondingly reduced to reflect any excess contributions from the prior year.
“Given the substantial burden placed by the reinsurance fee on large employers – equaling millions of dollars in some cases – excess contributions should not simply be doled out to issuers that have already received the amounts to which they are entitled under the formula,” Macey and Young argue.
ERIC further recommends that the open enrollment period for the 2015 benefit year for the Exchanges should begin no later than November 1, 2014, instead of November 15, as proposed by HHS. The letter explains that ERIC members are concerned that the timing of the beginning of the Exchanges’ open enrollment period will disadvantage workers, retirees, and their families, as many employers end their plans’ open enrollment periods by the beginning of November, if not before. “If open enrollment for the Exchanges does not commence until November 15, these workers and retirees will not have sufficient time to compare the options available in their employers’ plans with those available to them on the Exchanges,” the letter notes.
ERIC’s letter can be accessed by clicking on the link below.