The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (PCORI) to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute's research is to be funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans. These fees are called comparative effectiveness research fees or CER fees.
On Dec. 5, 2012, the Internal Revenue Service (IRS) issued final regulations on the CER fees. The final regulations address many important details regarding which health insurance issuers and plan sponsors are subject to the fees and how the fees are calculated and paid. For example, the regulations address how the CER fees apply to health reimbursement arrangements (HRAs) and health flexible spending accounts (FSAs).
The final regulations apply to plan years ending on or after Oct. 1, 2012 and before Oct. 1, 2019.
Click here for your PCORI legislative brief...
In addition ACA established three risk-spreading programs to provide payments to health insurance issuers that cover higher-risk populations and to more evenly spread the financial risk carried by issuers. These programs, which will be effective in 2014, are a transitional reinsurance program, a temporary risk corridor program and a permanent risk adjustment program.
The transitional reinsurance program is intended to help stabilize premiums for coverage in the i
ndividual market during the first three years of Exchange operation (2014 through 2016) when individuals with higher-cost medical needs gain insurance coverage. This program will impose a fee on health insurance issuers and self-insured group health plans.
On March 23, 2012, the Department of Health and Human Services (HHS) issued final regulations implementing ACA standards for reinsurance, risk corridors and risk adjustment programs.
On Dec. 7, 2012, HHS released proposed regulations to expand upon these standards. The proposed regulations describe how much issuers and sponsors of self-insured plans would be required to pay under the reinsurance program and provide other important program details. The regulations are only in the proposed stage, and will not be effective until after they are issued in final form.
This MacCorkle Insurance Service Legislative Brief describes key aspects of ACA's PCORII and transitional reinsurance program, including the fee information from the proposed regulations.
Click here for your Reinsurance Fee legislative brief...
