Health Care Reform Fees

Health Care Reform feesWe know you don’t want to pay anymore money than absolutely necessary for health insurance, but there are a few fees that are going to implemented in the new health care reform law. Under the Affordable Care Act (ACA), there will be new fees and taxes assessed on all Indianapolis commercial (group)  health insurance plans. These fees and taxes are to fund some of the changes mandated by the new health care reform law.

Fully Insured Health plans will see the following fees prorated into their premiums over 12 months:

1. Patient-Centered Outcome Research Institute (PCORI) Fee: The ACA imposed a new fee on group health plans and self funded health plans of $1 per member for the 1st year, $2 per member the second year and then indexed to medical inflation there after.

2.Insurer Fee: This fee is collected from health issuers based on the net premium of the group health plan. This is a permanent fee and is estimated to be about 2.5% of the fully insured premium. The Insurer fee will fund premium tax subsidies for people that buy insurance through the exchange.

3. Transitional Reinsurance Fee: Between 2014-2016, the ACA will impose a fee on fully insured  and self-funded group health plans. This fee is to help offset the initial claims that the health insurance industry is expected to take on at the beginning of 2014. The money will spread the financial risk that the health insurance industry takes on in the individual market. The fee is $5 per member per month on both fully-insured and self-funded group plans.

4. Risk Adjustment Fee: This fee is to spread the risk so that adverse selection does not occur.  The fee is $1 per member per year.

The total cost of the all the new fees is estimated at 3.8% of the fully insured premium. If your group plan is $100,000 a year you now have to pay about $3,800 a year to help fund health care reform. These fees are just one aspect that will impact rates.



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