TRANSITIONAL REINSURANCE PROGRAM (TRP)
One of the provisions in the Patient Protection and Affordable Care Act (PPACA) that has not been heavily publicized but will soon impact self-funded plans is the Transitional Reinsurance Program (TRP). With the implementation of Exchanges in 2014, the TRP is designed to stabilize premiums in the individual market.
Reinsurance entities will collect payments from self-funded plans to cover high-risk individuals from 2014-2016. The estimated amount that needs to be collected during these three years is $25 billion. Recently, HHS has stated that the first-year assessment will be $63 per participant. For example, a self-insured employer with 500 covered employees will pay $31,500 in annual fees in 2014. Plan sponsors will have to notify HHS of the number enrolled on their plans by Nov. 15, 2014. HHS will then assess the fee to plan sponsors by Dec. 15, 2014, with payment due within 30 days of the notification.
The fee applies to those electing major medical plans and not those solely enrolled in dental or vision plans. Former employees on COBRA will be included in the fee calculations whereas retirees enrolled in Medicare and receiving coverage from their former employers will not be included. Third-party administrator will remit the fees on behalf of self-funded plans. Fully-insured plans will have the fee paid for by insurers.