HHS has issued is proposed Notice of Benefit and Payment Parameters for 2015 (here). It is frankly a pretty mind-numbing piece of regulatory handiwork, but it includes a few interesting nuggets for employers.
Transitional Reinsurance Program. The notice discusses the transitional reinsurance program at some length but has three proposals that are particularly noteworthy.
(1) 2015 Contribution Rate. The proposed contribution rate for 2015 is $44 per covered life, as compared to $63 per covered life for 2014.
(2) Change in Payment Schedule. The payment schedule is proposed to change so that the fee would be paid in two installments instead of one. The first installment will generally be due in January following the benefit year, and the second installment will generally be due in November or December following the benefit year. Both installments will be based on the same enrollment count.
For the 2014 benefit year, it is anticipated that this will result in the $63 fee being paid as follows: $52.50 in January 2015 and $10.50 in late 2015. For the 2015 benefit year, it is anticipated that this will result in the proposed $44 fee being paid as follows: $33 in January 2016 and $11 in late 2016.
(3) Exclusion for Self-Administered Self-Insured Plans. Several groups that sponsor self-insured plans (notably multiemployer self-insured plans) have been lobbying for an exemption from the transitional reinsurance fee. (There is some merit to their arguments, since the transitional reinsurance program will not benefit them, but that's beside the point here.) While this proposed notice does not directly exempt them, it provides them an opportunity to be exempt, if they are (or can become) self-administered, meaning they do not rely on a third-party administrator in connection with enrollment or claims processing or adjudication.
This is likely to be a narrowly used exclusion, since the vast majority of self-insured major medical plans use a TPA for claims processing and adjudication. But in certain cases it may cause plans to consider bringing administration in-house, rather than outsourcing it.
2015 Plan Maximums. The notice proposes the following plan maximums for 2015:
- The overall out-of-pocket maximum (for non-grandfathered plans) would increase to $6,750 for self-only coverage and $13,500 for coverage other than self-only coverage, as compared to $6,350/$12,700 for 2014.
- The maximum deductible for insured plans in the small-group market would increase to $2,150 for self-only coverage and $4,300 for coverage other than self-only coverage, as compared to $2,000/$4,000 for 2014.
Employee Choice in the FF-SHOP. The notice proposes that the "employee choice" model will be available in the federally facilitated SHOP exchange (or "FF-SHOP") beginning in 2015. (It was supposed to be available beginning in 2014, but prior regulations deferred it until at least 2015.) Under the employee choice model, employers purchasing group coverage through the SHOP exchange can designate an entire "metal level" on the exchange, rather than designating a single plan. Employees are then allowed to chose any plan offered in that metal level, with the employer providing the same contribution toward the premium cost, regardless of the plan chosen.
Outside of the private exchanges being utilized by some very large employers, the employee choice option under the SHOP exchange is about the closest thing to a pure defined contribution program with employee choice available in connection with an employer sponsored plan. Prior to 2016, the SHOP is available only to employers with 50 or fewer employees. In 2016, that increases to 100 or fewer employees. And in 2017, states may make the SHOP available to employers in both the small-group and large-group market.