It’s raining regulations

Four major ACA regulations were issued today. The first two impact the FEHBP.

The Internal Revenue Service issued a proposed rule implementing the health insurer fee (Internal Revenue Code § 9010). When you see your health insurance premiums increase significantly next year, don’t blame the sequestration, blame this fee which for 2014 allocates $8 billion across all lines of health, dental and vision insurance, including insured FEHB plans. The fee increases annually thereafter. The fee is expected to add 2% to premiums next year according to AHIP.

The Department of  Health and Human Services issued its final 2014 parameters notice which provides guidance on the transitional reinsurance fund fee. The fee expected to be $63 per belly button (excluding annuitants with primary Medicare coverage) in 2014 is imposed on all health plans, including FEHB plans, to provide a reinsurance fund for qualified health plans operating in the health insurance exchanges next year and reimburse the Treasury for the $5 billion spent on the ACA’s early retiree reinsurance program. Ironically, FEHB plans which are loaded with early retirees were prohibited from participating in this program but are being required to refund the appropriations. This assessment sunsets after 2016 (unless Congress changes the law.)  Cost curve up.

The Office of Personnel Management released its final rule governing the multi-state plan program. The ACA expects OPM to contract with at least two carriers to sponsor multi-state plans in the health insurance exchanges. reports on the final rule here.

The Department of Health and Human Services also released a proposed rule governing an adjunct to the health insurance exchanges for small businesses called the SHOP program. The Hill explains that “Through the SHOP system, workers will be able to compare plans side-by-side, and employers will have the option of making a monthly payment to SHOP rather than multiple insurance plans.”