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Guidance on Health Reform Law's Transitional Reinsurance Program Requested

Many questions remain unanswered about the Transitional Reinsurance Program, the Washington-based benefits lobbying group noted in a letter sent this month to the U.S. Department of Health and Human Services, which will enforce the program.

October 15, 2012
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Related Topics: Health Care Reform, COBRA, Health Care Costs, Retiree Health Care, Health Care Benefits, Latest News
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The American Benefits Council is asking federal regulators for guidance on the Transitional Reinsurance Program, an obscure but costly health care reform law-created program that will require self-funded employers to pay billions of dollars that will partially reimburse commercial insurers writing policies for individuals with very high health care costs.

The first-year assessment for the three-year program, which begins in 2014, is expected to be in a range of $60 to $90 per health care plan participant. If the upper end of that estimate proves accurate, the first-year tab for an employer with 100,000 health care plan participants could be nearly $10 million.

Many questions remain unanswered about the Transitional Reinsurance Program, the Washington-based benefits lobbying group noted in a letter sent this month to the U.S. Department of Health and Human Services, which will enforce the program.

Some of those issues include:

• Does the fee apply to retiree health-only plans? ABC said such plans should be excluded "in light of the strong public policy reasons for encouraging employers to sponsor retiree-only plans and other plans for former employees."

• Should Consolidated Omnibus Budget Reconciliation Act beneficiaries be included in calculating the fee? "Additional guidance would be helpful to clarify whether the fee is intended to be assessed on persons receiving coverage as a result of coverage," according to the ABC letter, which was co-signed by Paul Dennett, senior vice president-health care reform and Kathryn Wilber, senior counsel-health policy.

• Is the fee tax-deductible? "We recommend that HHS work with Treasury and the Internal Revenue Service to issue guidance affirming that the fee is deductible in order to eliminate any uncertainty on this matter," Dennett and Wilber wrote in their letter.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. Comment below or email editors@workforce.com.

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