4 weapons against the new PPACA reinsurance program

A big, new Patient Protection and Affordable Care Act (PPACA) risk-management program — the “transitional reinsurance program” — is about to start sucking $12 billion out of health insurers and self-insured employer plans with third-party administrators (TPAs) starting Jan. 15, 2014.

The Center for Consumer Information & Insurance Oversight (CCIIO) — the arm of the U.S. Department of Health and Human Services (HHS) that administers the program — has just posted a collection of reinsurance program compliance documents aimed at insurers, employers, TPAs and their professional advisors.

The program is supposed to be transitional and last just three years — but “temporary” government initiatives have been known to last longer than expected, as anyone reading this article while working in a “temporary Quonset hut” office set up during World War II knows very well.

Drafters of PPACA included the section that created the reinsurance program — Section 1341 — in an effort to protect individual major medical premiums against all of the many health insurance market changes made by PPACA. The program calls for all health insurance issuers and self-insured group health plans with TPAs to contribute a fixed amount per enrollee.

See also: How the PPACA 3 R’s risk management programs work

The program is supposed to use the cash to protect insurers that issue PPACA-compliant major medical coverage inside or outside the public exchange system against part of the cost of covering enrollees with high medical bills — to compensate for the fact that the insurers now must offer coverage to applicants without considering the applicants’ health status, and without using personal health factors other than age and tobacco use when setting premiums.

See also: Could PPACA reinsurance pay $20 per member per month?

In practice, for the insurers, TPAs and employers affected, filing the required employee counts and payments has meant going on a scavenger hunt to find the documents that describe the new system, and understanding the documents has meant spending quality time with compliance lawyers and other experienced readers of federal regulatory documents.

If you are in the insurance market, you may be getting questions in connection with any TPA services your company offers. Or you may be getting questions and comments from clients who know you have nothing to do with their employee counting pain but simply want to complain to someone who understands what they’re going through.

To learn about the tools CCIIO is offering to give employee-counting information, payment-making information and other reinsurance-related information from the horse’s mouth, read on.

1. CCIIO’s main reinsurance program page

CCIIO actually set up the page in July, but the agency has just started to flesh it out with bits of useful information — such as a little table showing when everything is actually due.

A self-insured plan that does not use a TPA will not have to make contributions for the first two years.

But, for organizations that will have to file the employee counts, or pay the reinsurance program bills, CCIIO has just announced that the program filing form will go live on the Web Oct. 24.

• Employee counts will be due Nov. 15, 2014.
• The first payment, for $52.50 per covered life, will be due Jan. 15, 2015.
• A second payment, for $10.50 per covered life, will be due Nov. 15, 2015. 

(An entity can simplify life by filing one $63 payment per life Jan. 15, 2015, rather than making one payment Jan. 15, 2015, and a second payment Nov. 15, 2015.)