2013
With all the ills of the public sector none can compare with government running anything and the resulting political interference simply to get votes or pay back past favors. No party is immune and no constituency exempt, but when it comes to social programs the Democrats have the edge, especially when it involves their traditional base, unions.
The Affordable Care Act includes a provision to offset some of the risk for insurance companies in the exchanges. This reinsurance program is intended to protect insurers from high claims in the early years. The program is paid for by a fee on insurance companies and self-insured employer and union health plans. In 2014 the fee is $63 per person covered by the plan. That’s millions of dollars for some large plans. Read more about the program here. Needless to say, that expense is added to the premiums everyone pays.
Now read the sentence from the Federal Register I have placed in bold. Do you know what that means? Well those certain plans are union run plans, also known as Taft-Hartley plans. And not all such plans are being given an exemption, just the ones where the claim payments are self-administered. So, if you work for a large employer, you help pay the reinsurance fee. If you are a union member with a union run plan that uses a third-party to pay claims (very common), you pay the fee. But, if you are covered by a plan favored by Obama and company, you don’t.
Sounds fair to me. 😳
From the Federal Register October, 30, 2013
We also note that, to alleviate the upfront burden of the reinsurance contributions, we intend to propose in future rulemaking to collect reinsurance contributions in two installments—the reinsurance contributions for reinsurance payments and administrative expenses would be collected at the beginning of the calendar year following the applicable benefit year, and the contributions for payments to the U.S. Treasury would be collected at the end of the calendar year following the applicable benefit year. We also intend to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years.
QUINNSCOMMENTARY 
Dick, curious as to your estimate as to how much this impacts health care cost? About 1%? This looks like the cost for covering high claims coming in under pre existing conditions? As you have stated accurately in the past there are no “free” benefits.Someone will pay for these improvements in coverage. Are you aware of any other similar fees that will impact our costs?
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Here it is – announced the Wednesday before Thanksgiving, just so’s you might not notice and ruin turkey day for the Obama Administration staffers. So, tell me, what is the difference in this plan in 2014 (when they must pay the reinsurance fee) and 2015, 2016 when they don’t? That is, they say they can’t change the proposed $63 fee for 2014 for these entities without either raising the fee for others or reducing the contribution to the reinsurance pool. So, because of that, these entities are charged a fee that they should not be charged? Crap.
Sounds like someone got to them to change their mind because someone else “reasonably believed” there was another interpretation…
Finally, isn’t the trust a “3rd party administrator” for the employers whose employers participate in multi-employer plan coverage?
45 CFR Parts 144, 147, 153, 155, and 156
Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2015
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
b. Self-insured plans without third party administrators
Section 1341(b)(1)(A) of the Affordable Care Act provides that “health insurance issuers
and third party administrators on behalf of group health plans” must make reinsurance
contributions. We recognize that some self-insured group health plans self-administer the
benefits and services provided under the plan, and do not use the services of a third party
administrator. We believe that section 1341(b)(1)(A) of the Affordable Care Act clearly applies to both issuers of insured plans as well as to self-insured plans that use third party administrators.
However, our continued study of this issue leads us to believe that this provision may reasonably be interpreted in one of two ways – it may be interpreted to mean that self-insured, self administered plans must make reinsurance contributions, or it may be interpreted to mean that such plans are excluded from the obligation to make reinsurance contributions. For the reasons discussed below, we propose to modify the definition of a “contributing entity” for the 2015 and 2016 benefit years to exclude self-insured group health plans that do not use a third party administrator in connection with claims processing or adjudication (including the management of appeals) or plan enrollment.
Following consideration of the comments submitted with respect to the 2014 Payment
Notice and the proposed Program Integrity Rule, we propose that for the 2015 and 2016 benefit years, the phrase “third party administrators on behalf of group health plans” not include selfinsured, self-administered group health plans. An insured plan and a self-insured plan administered by a third party administrator are similar in that each arrangement involves an employer and an outside commercial entity – an issuer or a third party administrator (which is often an insurance company or an affiliate) – for the administration of the core health insurance functions of claims processing and plan enrollment. We note that under section 1341(b)(3)(B) of the Affordable Care Act and §153.400(a)(1)(ii), reinsurance contribution amounts are to reflect a “commercial book of business.” Our consideration of these comments leads us to believe that a group health plan administered by a third party administrator would normally be viewed as part of the third party administrator’s “commercial book of business,” but that a self-insured, selfadministered plan would not normally be viewed as part of any entity’s “commercial book of business.”
Therefore, we propose that for the 2015 and 2016 benefit years, a “contributing entity”
would mean: (a) a health insurance issuer; or (b) a self-insured group health plan (including a group health plan that is partially self-insured and partially insured, where the health insurance coverage does not constitute major medical coverage) that uses a third party administrator in connection with claims processing or adjudication (including the management of appeals) or plan enrollment. The proposed modification for the 2015 and 2016 benefit years would exclude from the obligation to make reinsurance contributions those self-insured plans that do not use a third party administrator for their core dministrative processing functions – adjudicating, adjusting, and settling claims (including the management of appeals), and processing and communicating enrollment information to plan participants and beneficiaries. This proposed amendment would recognize that some self-insured group health plans, which we believe would generally not be considered to be using the core services of a third party administrator, may use third parties for ancillary administrative support, and we would consider these plans to be self-administered for purposes of the reinsurance program.
For purposes of the definition of “contributing entity,” we propose to consider a third
party administrator to be, with respect to a self-insured group health plan, an entity that is not under common ownership or control with the self-insured group health plan or its sponsor that provides administrative services to the self-insured group health plan in connection with claims processing or adjudication (including the management of appeals) or plan enrollment.
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