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Life Health > Health Insurance

How to pay your PPACA reinsurance bill

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The Center for Consumer Information and Insurance Oversight (CCIIO) has published a new manual that explains how health insurers and benefit plan administrators should calculate and pay federal reinsurance program bills.

The 55-page guide, “2015 ACA Transitional Reinsurance Program: Annual Enrollment and Contributions Submission Form Manual,” Version 1.0, explains how insurers, and independent administrators of self-insured employer plans, can make Patient Protection and Affordable Care Act (PPACA) reinsurance program payments for 2015.

Drafters of PPACA created the temporary reinsurance program in an effort to protect issuers of PPACA-compliant individual coverage against catastrophic health risk. The program is supposed to use a broad-based tax to reimburse issuers of fully PPACA-compliant individual coverage for part of the cost of covering individual enrollees who have catastrophic claims in 2014, 2015 or 2016.

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PPACA drafters call for the program to take in $8 billion in contribution revenue for 2015, with $6 billion to be spent on reinsurance payments and $2 billion to go to the general fund at the U.S. Treasury.

The reinsurance program was originally supposed to take in $10 billion for 2014, spend $8 billion on reinsurance payments for 2014 and send $2 billion to the U.S. Treasury general fund. In June, HHS officials said they expected the program to take in $8.7 billion for 2014 and make $7.9 billion in reinsurance payments. They did not say whether the program would send cash to the Treasury general fund.

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For 2015, the program is supposed to raise a total of $6 billion in contribution revenue and send $2 billion to the Treasury general fund. The U.S. Department of Health and Human Services (HHS), the parent of CCIIO, is requiring health insurers, and self-insured employer plans with administrators, to make a reinsurance program contribution of $44 per covered life.

Contributing entities are supposed to make their reinsurance payments through the government’s system. 

A “contributing entity” can choose whether to make one $44 payment per covered life, or make one $33-per-life payment and one $11-per-life payment.

To make a full reinsurance contribution for 2015 with one payment, a contributing entity must submit a reporting form by Nov. 16, 2015, and pay $44 into the program by Jan. 15, 2016.

An entity that wants to make two separate payments must submit a reporting form by Nov. 16, 2015, but it can wait until Jan. 15, 2016, to submit the first payment, and Nov. 15, 2016, to submit the second payment.

Submitters that are making payments for four or more entities may have to upload extra supporting documentation. The supporting documentation cannot contain special characters, including square brackets, apostrophes or ampersands.

A contributing entity with more than 3,030,303 covered lives might have to get advice from CCIIO about how to proceed, because the annual enrollment counts in a supporting documentation file cannot exceed 3,030,303, according to the manual.

See also: Feds firm up health rate filing calendar


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