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Reinsurance Submissions Due 12/5 for Self-Funded Accounts

All employers who offered a self-funded medical program (or “alternative funding”) in any months from Jan 2014 – Sep 2014 are subject to the Transitional Reinsurance fee in 2014. Employers are required to file their average membership counts representing Jan-Sep 2014 by Dec 5. (Note: The original deadline was Nov 17. On 11/14, CMS extended the deadline until Dec 5.) For 2014, the employer pays $63 times the average number of members. This email provides relevant and important information about the reporting and payment processes.

The Process:

The employer reports information about its company and the average number of covered members, provides ACH payment information to the IRS, and provides supporting documentation in CMS’s required format. The payment can be drafted in one combined installment or in two installments. During the process, the employer schedules the payment draft (or drafts). The first payment (or combined payment) must be scheduled at least 30 days after count submission and before Jan 15, 2015. The second payment (if applicable) must be scheduled at least 30 days after count submission and before Nov 15, 2015.

The Steps:

  1. Determine the average number of covered members to report (see second and third bullets in Answers section below)
  2. Use the government tool (you must enable macros) to create a CSV file containing the “supporting documentation” that you will upload during the process. Use this job aid manual as a guide. We recommend making a “Combined Collection” to pay the total fees at once instead of separate installments. The entity type is SI (for “Self-Insured”). Use the “Create CSV File” control button to export the data to a CSV file and save it. Do not open the file after creating it.
  3. Create an account on Pay.gov
  4. We recommend that the employer click to edit their profile under My Account so that they receive and advanced reminder of the ACH draft[s] they will schedule.
  5. Navigate to the input form or search for “ACA Transitional Reinsurance Form”
  6. Enter company information in the first form. You have to list at least two unique contacts. For the third, you can repeat one of the first two contacts.
  7. Select Payment Type. If making a combined payment select the third option. If paying in two installments, select the First Collection and Second Collection (first and second option, respectively).
  8. Enter the Enrollment Count. The form should auto-populate with the totals.
  9. Check the Acknowledgement Statements
  10. Attach the CSV file you created in step 3
  11. Schedule the payment date and enter the banking information for the ACH draft. Review and submit.
  12. To prevent the transaction from being blocked by your bank, contact your bank and have them add the programs information to the allowed company list. The ALC+2 is 7505008015 and the company name is USDEPTHHSCMS. More info.

The process is explained thoroughly in this Form Manual.

Answers to Common Questions:

  • Your “Entity Type” is SI (for “self-insured”). You enter this to complete the supporting document tool.
  • Most plan administrators provided the counts to their clients (e.g.: email attachment, letter in the mail, or posted on employer portal). If you have not received a report or the report you received shows an average of 0, contact your plan administrator immediately.
  • If your plan administrator has not provided a report or provided a report that shows 0 as the average, you will need to calculate it manually. The possible counting methods are explained here or here. The easiest method for employers who maintained a self-funded plan all year is to average the count from the same date in each of the three quarters (e.g.: 1/1, 4/1, and 7/1). Employers who moved to self-funding during the 2014 calendar year should average the number of members on the same day in each month and use 0 for months that they were not self-funded. The calculation should be rounded to the nearest 100th.
  • Employers who moved to a self-funded plan (from fully insured) on 8/1 or 9/1 are still required to report and should use counts on a monthly basis. Use 0 for each month you were not self-funded.
  • If you are paying your plan administrator to submit the counts and payment information on your behalf, you are still liable for the accuracy of the reporting. You need to verify it yourself.
  • Employers who did not have a self-funded plan during the first three quarters of 2014 are not required to pay a fee. Employers who left self-funding for fully insured in the fourth quarter of 2014 do not get a discount on their fee obligation.

Additional Resources:

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