Legisltative/Regulatory Update
January 19, 2012 – A delegation of SIIA members and lobbyists met today with senior officials with the U.S. Department Health & Human Services to address how final regulations establishing how a transitional reinsurance program mandated by the ACA will affect the self-insurance industry.The health care reform law requires that states create reinsurance facilities to backstop insurance carriers offering individual coverage sold through state insurance exchanges from 2014 through 2016. These facilities will be funded by fees collected from self-insured health plans and health insurance carriers. The aggregate funding requirement is $10 billion in 2014, $6 billion in 2015 and $4 billion in 2016.
SIIA has been engaged with HHS over the past year on the development of this significant regulatory initiative. Today’s meeting focused on the role of third party administrators in the collection of fees from self-insured plans. As previously reported, HHS intends to mandate that TPAs be responsible for communicating to their self-insured employer clients of their fee obligations and facilitate payment on their behalf.
Key updates from this meeting include:
• The final rule is expected to be issued in the next two months that will confirm the broad regulatory framework. This final rule will be supplemented by a series of guidance bulletins, which will provide more detail on how covered entities must comply with the rule.
• As part of the final rule HHS will specify whether the fees assessed on self-insured health plans will be based on the number of plan participants or as a percentage of medical claims costs. (The regulators appear to be leaning to the former approach.)
• The actual contribution amount requirements will be announced before the end of 2012 through a “federal payment notice.”
• HHS does not yet know how to identify self-insured health plans in any comprehensive way and is similarly challenged with regard to identifying TPAs.
• Assuming the fees will be based on the number of plan participants, TPAs will likely be expected to provide reports submitted at the time of payment submission detailing breaking out the number of plan participants by state.
• No decisions have been made with regard to compliance enforcement mechanisms.
• Regulators within the U.S. Department of Treasury have been separately tasked with developing a final rule with regard to the collection of fees from self-insured health plans to fund research on comparative medical treatment. This process will involve many of the same issue as the transitional reinsurance program. SIIA has been invited to a follow-up meeting with both HHS and Treasury Department regulators to encourage coordination.
As noted above, the final rule is expected to be published soon and SIIA will inform you of this development. The rule is certain to raise numerous compliance questions that will be addressed in subsequent guidance notices issued periodically throughout the year.
SIIA will continue to work with the regulators in order to provide them the technical expertise necessary to develop guidance that recognize how self-insured health plans and TPAs operate and as well as limitations with regard to compliance requirements.
In this regard, please watch for additional exclusive reports on this and other important regulatory issues throughout the year. Should you have any questions in the meantime, please contact SIIA Government Relations Director Jay Fahrer at 202/463-8161, or via e-mail at jfahrer@siia.org.
This and other legislative/regulatory developments will be covered at the association’s Legislative/Regulatory Conference, scheduled for March 7-9, 2012. Detailed conference information can be accessed on-line at www.siia.org.
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