The Affordable Care Act (ACA) calls for a number of federally mandated fees related to health insurers and plan sponsors. These fees impact groups differently depending on the size or funding structure of a group, and include the following:
The Patient-Centered Outcomes Research Institute (PCORI) fee supports clinical effectiveness research. The PCORI fee began in 2012 and will expire in 2019. For the first plan year (ending after September 30, 2012), the fee was $1 per member per year. For the next plan year, the fee is $2 per member per year. The fee will increase for inflation each year until 2019. This fee impacts all groups regardless of size or funding.
Market Share Fee
The market share fee funds tax subsidies for low-income individuals and families who buy insurance through the public marketplace. This permanent fee, which begins in 2014, is based on how much premium each health insurer collects. This fee impacts all fully insured groups, regardless of size.
Transitional Reinsurance Program Fee
The transitional reinsurance program fee will help fund a three-year program designed to stabilize the individual marketplace by offsetting the higher claims costs insurance carriers may have. The fee is $63 per member per year in 2014 and is expected to decrease in 2015 and 2016. It is scheduled to expire in 2016. This fee impacts all groups, regardless of size or funding.
Risk Adjustment Program Fee
The risk adjustment fee funds the Risk Adjustment Program, which is designed to help stabilize both the individual and small group insurance marketplaces. The program assists insurance carriers covering high-risk individual and small group members. The fee is $1 per member per year in 2014. This fee only impacts non-grandfathered, fully insured plans in metal tier products.
Please note: Self-funded groups are responsible for the Transitional Reinsurance Program and PCORI fees. Groups must calculate and pay these fees directly to the federal government.
All fully insured groups will see newly applicable federally mandated fees on invoices beginning in 2014.
Learn more about healthcare reform and how it impacts your business in our Healthcare Reform section.