The Affordable Care Act mandates the creation of a temporary reinsurance program to help stabilize premiums for coverage in the individual market. This program will be used to provide reinsurance payments to individual market issuers that cover high risk individuals. Payments will be based on claims incurred above an attachment point and below a reinsurance cap.
This program will be in effect from 2014 through 2016 and will be administered by the Department of Health and Human Services. In order to fund this program all health insurance issuers and third-party administrators on behalf of self-insured group health plans, will be assessed a yearly reinsurance fee. The Department of Health and Human Services will provide yearly fee notices containing that year’s reinsurance fee and the associated reinsurance details (i.e., the coinsurance rate, the attachment point and the reinsurance cap).
For 2014, the Department of Health and Human Services has indicated that:
- The estimated reinsurance fee is $63 per covered life.
- The uniform coinsurance rate will be 80%.
- The attachment point will be $60,000.
- The reinsurance cap will be $250,000.
- HHS will send invoices by December 15, 2014.
- Invoices will be payable in 30 days.
For plan years beginning on or after January 1, 2014, health care plans may not discriminate against health care providers so long as they acted within the scope of their license under applicable state law. At its most basic, this prevents health care plans from denying a benefits claim for a service outside a provider’s typical specialty area.
- This does not apply to grandfathered plans.
- This does not apply to specialized plans.
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