The form self-insured health plan sponsors need to submit the transition reinsurance fee, mandated by the Affordable Care Act, is now available on pay.gov. The deadline for submitting the completed online form is November 15, 2015.
This is the second year the fee has been levied against health insurance issuers and self-funded group health plans.The funds are used to stabilize premiums in the individual health market. The fee applies to grandfathered and nongrandfathered health plans as well as retiree health plans (unless coverage is secondary to Medicare or qualifies for another exemption).
The fee is based on members, which includes covered employees, dependents and spouses. The 2015 fee, payable in 2016, is $44 per member annually. In 2016, the fee will be $27 per member. The fee expires after 2016 payments are received. Plan sponsors are permitted to deduct the fee as an ordinary and necessary business expense.
An initial payment is required by January 15, 2016. Respondents can pay the fee in full or make partial payment with the final payment collected by November 15, 2016. Banking information is required at the time of submission.
Below are different methods for determining the transition fee calculation:
Actual count
Add the total number of members covered for each day of the first nine months of the benefit/calendar year and divide by the number of days in the first nine months.
Snapshot count
Add the total number of members covered on one date (or more dates if an equal number of dates is used for each quarter) in each of the first three quarters of the benefit year and divide by the number of dates on which the count was made. (A variation of this method, called the snapshot factor method, requires a more complex calculation. Determine the total number of members with self-only coverage on designated dates for each quarter and divide by the number of dates used for each quarter. Next, use the same designated dates to total the number of participants with coverage other than self-only and divide by the number of dates used for each quarter. Multiply the other-than self-only average by 2.35. Add the self-only total to the other-than-self-only total to determine the covered member count.)
Form 5500
Plans offering self-only coverage - Add the number of members reported on the Form 5500, covered at the beginning and end of the most current plan year and divide by 2.
Plans offering dependent/spousal coverage - Add the number of participants reported on the Form 5500 covered at the beginning and end of the most current plan year.
Employers may want to refer to the Quick Start Guide before completing the form.
