Transitional Reinsurance Program – Early Reinsurance Payments for the 2015 Benefit Year
The Transitional Reinsurance Program (TRP) was established under PPACA and pays for a corridor of medical claims to help stabilize premiums in the individual health insurance market. A federally mandated reinsurance program, it provides reinsurance to issuers of individual health insurance policies from 2014 to 2016.
Early Reinsurance Payments for the 2015 Benefit Year
On October 9, 2015, CMS announced that it will make an early payment under the TRP for the 2015 benefit year to issuers of reinsurance eligible plans. CMS is anticipating making this early payment in March 2016. Reinsurance funds not paid out through this early payment will be paid out in late 2016, as part of the standard reinsurance data submission, validation, calculation, and payment process.
For the 2014 benefit year, CMS made reinsurance payments at a coinsurance rate of 100 percent. Following payments for the 2014 benefit year, surplus reinsurance funds remained available from the 2014 benefit year, which have been rolled forward for the 2015 benefit year. This surplus, combined with the additional collections of reinsurance contributions for the 2015 benefit year and greater experience in loading claims on issuers’ EDGE servers, will permit CMS to make an early partial payment.
CMS will make the early payment at a coinsurance rate of 25 percent. For the 2015 benefit year, the reinsurance attachment point is $45,000, and the reinsurance cap is $250,000. The final coinsurance rate for the 2015 benefit year, which under CMS’ earlier guidance had been estimated at 50 percent, will be calculated based on total available reinsurance collections and accepted payment requests. CMS expects to announce the final 2015 coinsurance rate in June 2016.
CMS will calculate this early payment based on accepted enrollment and claims data made available through issuers’ EDGE servers as of February 1, 2016. Issuers are therefore encouraged to load all available claims and enrollment data for the full 2015 benefit year by 5 p.m. on that date. Data loaded for the early reinsurance payment will be subject to CMS data validation checks prior to calculation of reinsurance payment amounts. CMS will make technical assistance available to issuers to facilitate the successful submission of this data.
CMS’ notice concerning the early reinsurance payments can be viewed here.
TRP Summary Table
The following table summarizes the payment parameters and contribution rates for each of the three years of the TRP.
Key dates relating to the TRP are set out here.
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