ACA Transitional Reinsurance Payment Form and Manuals Issued | Practical Law

ACA Transitional Reinsurance Payment Form and Manuals Issued | Practical Law

The Centers for Medicare & Medicaid Services (CMS) has issued manuals and a form for use by health insurers and self-insured group health plans in submitting data and making payments under the Affordable Care Act's (ACA's) transitional reinsurance program.

ACA Transitional Reinsurance Payment Form and Manuals Issued

Practical Law Legal Update 6-585-5226 (Approx. 5 pages)

ACA Transitional Reinsurance Payment Form and Manuals Issued

by Practical Law Employee Benefits & Executive Compensation
Published on 26 Oct 2014 • USA (National/Federal)
The Centers for Medicare & Medicaid Services (CMS) has issued manuals and a form for use by health insurers and self-insured group health plans in submitting data and making payments under the Affordable Care Act's (ACA's) transitional reinsurance program.
On October 20, 2014, the Department of Health and Human Services' (HHS') Centers for Medicare & Medicaid Services (CMS) issued two manuals addressing the process for submitting data and making payments under the Affordable Care Act's (ACA's) transitional reinsurance program:
The submission form manual generally explains the process for preparing and submitting reinsurance payment, while the job aid manual is a Microsoft Excel workbook for creating supporting documentation that is submitted with the form.
On October 24, 2014, CMS also issued the submission form that will be provided to the government by health insurers and self-insured group health plans under the transitional reinsurance program.

ACA Transitional Reinsurance Program

The ACA established a transitional reinsurance program that is intended to stabilize premiums in the individual health insurance market by offsetting (in part) insurer risk associated with high-cost enrollees (42 U.S.C. § 18061) (see Legal Updates, Final Rules on Reinsurance, Risk Adjustment and Risk Corridor Programs, Proposed HHS and OPM Regulations Address Exchanges, Transitional Reinsurance Programs, Multi-state Plans and More and Proposed Rules Clarify Health Plan Liability for Reinsurance Program Contributions). Under the transitional reinsurance program, which will operate from 2014 through 2016, "contributing entities" (that is, health insurers and certain self-insured group health plans) will make contributions to fund:
  • Reinsurance payments to insurers of non-grandfathered plans in the individual market that cover high-cost enrollees.
  • Administrative costs associated with the program.
  • The General Fund of the US Treasury.
Although ultimate responsibility for making reinsurance payments lies with contributing entities, the tasks of submitting data and payments may be delegated to third-party administrators (TPAs) or administrative services-only (ASO) contractors. The entity that actually completes the payment submission process is referred to as a reporting entity.

CMS Manuals and Submission Process

The CMS manuals address the process, mechanics and deadlines for making transitional reinsurance program payments, which:
  • Generally depends on whether the payment is made in one installment or two.
  • Requires registration through the government's www.pay.gov website and completion of the following steps:
    • registration and account creation;
    • completing the submission form;
    • uploading supporting documentation; and
    • providing banking information and scheduling a contribution payment (which includes payment amount and date) based on the type of payment.
  • Involves accessing the contribution form and completing a series of steps to schedule and file the contribution payment.
To make the required payments, reporting entities must collect certain enrollment data and prepare an enrollment count, using counting methods that were described in related CMS guidance (July 2014). Under the July 2014 guidance:
  • Contributing entities must submit annual enrollment counts for their plans by November 15 of the applicable year.
  • The enrollment count must identify the number of a contributing entity's covered lives during the year for the entity's major medical coverage.
  • A contributing entity may calculate covered lives using specified counting methods (for example, the "actual count" or Form 5500 methods), but need not use the same counting method for reinsurance payments and payments under the Patient-centered Outcome Research rules (see Practice Note, Patient-centered Outcomes Research (PCOR) Fees under the ACA).
Contributing entities must use the same counting method for the entire year.
Annual enrollment count information will be provided via:
  • A submission form that requires (among other things) entities to list the names and contact information of individuals associated with the form and supporting documentation.
  • Supporting documentation submitted with the form that provides identifying information about the contributing entity and information about the annual enrollment count.
The enrollment submission filings are generally due on November 15th of the applicable year, and the 2014 annual enrollment count submission deadline is November 15, 2014 (see 45 C.F.R. § 153.405(b)). However, the actual reinsurance payments are not due until later. Contributing entities may submit their 2014 payments in either:
  • One installment (that is, a combined collection), by January 15, 2015 (reflecting the applicable rate of $63 per covered life).
  • Two separate installments, with:
    • the first installment due January 15, 2015 ($52.50 per covered life); and
    • the second installment due November 15, 2015 ($10.50 per covered life).
Before submitting the form and supporting documentation, a reporting entity will:
  • Collect the contributing entity's information and enrollment data necessary to complete the process.
  • Calculate the annual enrollment count using one of the permitted counting methods.
  • Prepare supporting documentation.

Recordkeeping and Audits

Contributing entities are subject to certain recordkeeping requirements related to the transitional reinsurance program. Under these recordkeeping rules, contributing entities must:
  • Maintain records and documents for at least ten years (whether paper, electronic or in other media) sufficient to demonstrate the entity's enrollment count information submitted to the government.
  • Make those records and documents available on request by HHS, for purposes of verification, investigation, audit or general review of reinsurance contribution payments.
In its submission form manual, CMS also indicated that it may contact individuals listed in a contributing entity's submission form, and that these individuals must therefore be able to discuss information submitted in the entity's form and submitting documentation.