Update – new fees and taxes on insurance companies

This is a quick summary, paraphrased from the Medical Mutual of Ohio broker update today.  Its obvious (to me) that these fees will all end up being paid, one way or another, by all of us. – Reeve

A new suite of taxes and fees is being assessed on
health plan sponsors in 2014 based on stipulations outlined in the
Affordable Care Act (ACA). This Special Broker Update is part of a
series of communications about these taxes and fees and how  we will
implement them.

The first fee, implemented in 2012, is the
Patient-Centered Outcomes Research Institute, or PCORI, fee. Currently
$0.16 for each covered member and each dependent, this fee will increase
to $0.18 for each in 2014. We will continue to separately disclose this
charge to fully insured groups only. Self-insured groups must pay this
fee directly to the government using IRS Form 720.

Beginning January 2014, other federal fees will be imposed. We expect them to be in the following ranges:

  • Reinsurance fee, approximately $5.25 per member per month
  • Market share fee, between 2 percent and 3 percent of the monthly premium

Reinsurance Fee
Medical Mutual will assess and collect the reinsurance fee across all medical
lines of business for all fully insured plans and self-funded groups;
excluded coverage includes stop loss, dental, vision and Medicare

Market Share Fee
Medical Mutual will assess the market share fee on all fully insured lines of business, including
dental and vision, with the exception of Medicare Supplement policies. Stop-loss applicability is to be determined.