Employers wrestling with how to budget for the additional costs associated with the 2010 health care reform law have one more cost to consider: the “transitional reinsurance program” fee. Barely discussed in the public forum up to now (probably because the amount per plan was not determinable), the government has clarified how this fee could impact employers sponsoring group health plans. It has issued proposed regulations estimating that the annual contribution rate to cover this fee for 2014 will be $63 per individual covered under a group health plan. 

The fee is intended to help stabilize premiums in the individual insurance market for the three-year period 2014 through 2016 by giving transitional funding to insurers that incur high claims in the individual insurance market.  Since health insurers cannot deny coverage or charge higher premiums to unhealthy or otherwise high-risk individuals to offset for the risk that the insurer will pay more in claims for such individuals, those insurers who cover such individuals essentially get a safety net. This transitional reinsurance program fee is one of three premium stabilization programs established under health care reform.  

Contributions for the transitional reinsurance program are assessed on insurers of fully-insured group health plans and third-party administrators of self-funded group health plans. Naturally, it is expected that insurers will pass along the cost of this fee to employers sponsoring insured group health plans and, since a self-funded plan generally is funded by employer assets, employers with self-funded plans will pay the fee, too.    

The transitional reinsurance program fee is in addition to the “comparative effectiveness” or “patient-centered outcomes research” fee ($1 per covered individual for the first plan year ending on or after October 1, 2012, then $2 per covered individual for subsequent plan years until 2019).

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Photo of Monique Warren Monique Warren

Monique Warren is a Principal in the White Plains, New York office of Jackson Lewis P.C. Ms. Warren is a member of the Employee Benefits Counseling, Executive Compensation, Benefits Litigation and Workplace Privacy Practice Group.

Ms. Warren counsels employers on employee benefits compliance…

Monique Warren is a Principal in the White Plains, New York office of Jackson Lewis P.C. Ms. Warren is a member of the Employee Benefits Counseling, Executive Compensation, Benefits Litigation and Workplace Privacy Practice Group.

Ms. Warren counsels employers on employee benefits compliance and administrative matters, drafts plan documents and employee communication materials, and represents employers to government agencies and in employee benefit litigation. Her expertise includes health and welfare plans as well as retirement plans.

Ms. Warren has spoken at numerous client and professional association events including SHRM and WEB meetings. She also has presented numerous seminars on employee benefits compliance topics including benefits basics for human resource professionals, HIPAA privacy and security, 409A requirements, and annual legal updates.

Prior to joining the firm in 2006, Ms. Warren was a member of the employee benefits group of a large Chicago law firm and later maintained her own practice in Illinois, representing employers in employee benefits, employment and employment-related immigration matters. While attending law school, she was an intern in the tax clinic at Loyola University Chicago School of Law and was a judicial extern for the Honorable Blanche Manning, Federal District Court, Northern District of Illinois. As a law student, she received academic honors and was a member of the moot court employment law team.

During the ten years prior to attending law school, Ms. Warren directed human resource functions in manufacturing and research enterprises. She was certified as a Senior Human Resource Professional by SHRM in 1996.