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Healthcare Reform Fees Simplified

There are three main fees that will directly impact premium rates in 2014, although the PCORI program and its fee are already in place.  Most carriers, are already tacking on prorated portions of each of these fees at renewal time this year.


Patient-Centered Outcomes Research Institute (PCORI).  This fee was created to fund research, as the name suggests, and is paid by both fully insured and self funded plans.  For policies with a plan year that ends prior to October 1st of 2013 the fee is $1 per member per year (PMPY).  For all plans ending after this date, the fee is $2 PMPY and in subsequent years the fee will inflate at a rate to match the general inflation of healthcare costs.  So in 2014 the fee is $2 PMPY and is expected to be in the $2.12-$2.20 area for 2015.


Transitional Reinsurance Program.  This fee is assessed to support a reinsurance program to stabilize premiums in the individual market during the first three years of exchanges (2014-2016).  The fee is $63 PMPY in 2014 and will also be assessed to both fully insured and self funded programs.  The fee amount will decrease thereafter to meet reducing total budget goals.  We expect the fee to be in the area of $44 PMPY in 2015. 


Annual Fee on Health Insurance Providers.  This fee was created to fund certain portions of the PPACA and is assessed only to fully insured plans since it is paid by health insurers.  This fee will be assessed to meet total national budget goals and will vary by carrier based on their total premiums written.  Based on a number of studies and estimates, we believe the percentage will average around 2% of premiums in 2014 and 2.5% in 2015, but again, this will vary from carrier to carrier.

 


So to summarize, a self funded plan will pay a total of $65 per member in healthcare reform fees in 2014.  A fully insured plan will pay the same $65 per member plus another 2% or so of premiums in 2014 in PPACA fees. 

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