Reinsurance Fees Will Cost Group Health Plans
Beginning in 2014, the Affordable Care Act (ACA) establishes the following three risk-spreading programs to provide payments to health insurance issuers that cover higher-risk populations and to more evenly spread the financial risk carried by issuers: a transitional reinsurance program, a temporary risk corridor program and a permanent risk adjustment program.
The transitional reinsurance program is intended to help stabilize premiums for coverage in the individual market during the first three years of Exchange operation (2014, 2015 and 2016) when individuals with higher-cost medical needs gain insurance coverage. This program imposes a fee on health insurance issuers and self-insured group health plans.
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