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Life Health > Health Insurance > Your Practice

Regulators eye PPACA tax effect on solvency

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A panel that helps set the rules for determining when health insurers are broke is thinking about how to handle a new federal assessment.

The Health Risk-Based Capital Working Group, part of the National Association of Insurance Commissioners (NAIC), recently put drafts of two assessment accounting proposals on its section of the NAIC website.

Regulators, credit rating analysts and others use of RBC ratios to determine whether insurers have enough assets to meet their obligations.

Health insurers and health plans are supposed to pay a total of $8 billion in fees this year through an assessment program created by Section 9010 of the Patient Protection and Affordable Care Act (PPACA).

The draft RBC forms call for a health insurers show its total adjusted capital level and RBC ratio, and also show what the capital level and RBC ratio would be without the cost of the PPACA fee.

Insurers, outside accountants, regulators and others have had different ideas about how to handle the fee. In California, for example, regulators prohibited carriers from using 2013 plan-year premium increases to save up money to pay the Section 9010 fee and other PPACA program fees in 2014.

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