How should insurers pay their PPACA fees?

The new PPACA fees could cost health insurers $20 billion in 2014 — an amount equal to about 3 percent of their revenue, the drafters said, citing the American Action Forum figures.

The drafters talked only about the mechanics of how insurers should handle the fees, not their views about whether insurers should have to pay the fees.

Because the PPACA fees resemble excise taxes, “it seems legitimate for an insurer to include such fees in the premium,” the drafters wrote in the paper. “Then the question is when an insurer should reflect the fees in the premium.”

The drafters list the following options:

• Have insurers file rates that extend for the entire 12-month policy year. An insurer could include a portion of the PPACA fees payable in 2014 starting on the policy anniversary in 2013.
• Have insurers file rates that extend for the entire 12-month policy year, with no inclusion of PPACA fees in 2013. Let the insurers bill for PPACA fees separately starting Jan. 1, 2014.
• Have insurers file rates that extend for the entire 12-month policy year. Don’t let insurers include PPACA fees in the 2013 premium rates but let the insurers have their rates change to reflect the new fees on Jan. 1,  2014. 
• Have insurers file rates that extend only until Dec. 31, 2013, with no  inclusion of PPACA fees. Require the insurers to submit new filings for rates effective on  Jan. 1, 2014.
• Prohibit insurers from including PPACA fees in their rates until the first policy anniversary that occurs on or after Jan. 1, 2014.

See also:

• Regulators seek cure for PPACA rate shock
• What will PPACA do to the non-exchange market?
• NAIC Creates Forum to Explore Alternatives to Straight-up PPACA