An interesting practice by some of insurance industry members came to the attention of our office. Affordable Care Act (also known as “Obamacare”) includes a provision, under § 1341 (see pp. 226-227), which mandates “insurance issuers, and third party administrators” to pay fees for a project called Transitional Reinsurance Program. The fee is determined by the Department of Health and Human Services and is set to be $63 for 2014. See 78 Fed. Reg. 15,410, 15460 (March 11, 2013). While Congress specified the parties who pay the transitional reinsurance fee – insurance issuers, and third party administrators – the ambiguity still remains as to whether the insurance issuers, and third party administrators can shift that fee on others (as opposed to coming up with the funds from their own corporate coffers and bringing less value to their shareholders). A letter addressed by one such member of insurance business community suggests that fee shifting is an option. Below is a partial reproduction of the letter (with specific identities being redacted): 2014 Affordable Care Act (ACA) Fee Notice Dear Jane Doe, As part of the Affordable Care Act (ACA) new fees will impact you beginning January 1, 2014. These new fees are…
Read More Affordable Care Act’s Transitional Reinsurance Program Fees: Who Pays?