Dear Sir or Madam:
The Business Roundtable (BRT) is an association of chief executive officers of leading U.S. Companies. Together, our members’ companies employ more than 16 million individuals and provide health care coverage to nearly 40 million American workers, retirees, and their families. BRT is invested in addressing health care costs that hamper essential economic growth.
BRT appreciates the opportunity to submit comments in response to the Center for Medicare & Medicaid Services (“CMS”) proposed rule, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2014 (“the proposed rule”). The proposed rule sets forth, among other things, the standards, national contribution rate, and methodology for calculating and collecting reinsurance contributions established under section 1341 of the Patient Protection and Affordable Care Act, Pub. L. 111-148, and the Health Care and Education Reconciliation Act, Pub. L. 111-152 (collectively, the “Affordable Care Act” or “ACA”).
BRT applauds CMS for the changes made in the proposed rule that streamline the collection of the transitional reinsurance fee. Specifically, BRT appreciates that the Department of Health and Human Services (“HHS”) will be singularly responsible for collection and distribution of the transitional reinsurance fee, even in states that establish their own reinsurance programs. BRT also appreciates that the transitional reinsurance fee will now be included as an adjustment to incurred claims in calculating medical loss ratio (“MLR”) costs. We would ask, however, that CMS clarify that the collected reinsurance fee will be considered a plan cost for all purposes.
However, BRT remains concerned about the level at which the transitional reinsurance fee has been set. For the reasons discussed below, BRT believes that the total amount of fees collected should be set at a level that represents the minimum amount that is necessary that can be determined at the end of the year. BRT further appreciates that the proposed rule sets collection of the fee at the end of the year and strongly recommends that this proposal be codified under the final rule.
Section 1341 of the ACA requires a transitional reinsurance program be established in each State from 2014 through 2016 in order to help stabilize premiums for coverage in the individual market during that time. The proposed rule implements the standards and requirements associated with According to the proposed rule, HHS intends to implement the reinsurance program “in a manner that minimizes the administrative burden of collecting contributions and making reinsurance payments,” which BRT strongly supports.
BRT Applauds the Improved Collection of Transitional Reinsurance Fee
Under the proposed rule, HHS will collect all contributions from health insurance issuers and self-insured group health plans or their third party administrators in all States, including those that elect to operate their own reinsurance programs. HHS would also implement a national per capita uniform contribution rate and payment calendar, as well as uniform reinsurance payment parameters that would be used to calculate reinsurance payments across all States, regardless of whether the State or HHS on behalf of the State operates the reinsurance program. Additionally, under the proposed rule, HHS would amend previous guidances to require a one-time annual reinsurance contribution collection, as opposed to quarterly collections. BRT applauds HHS for acknowledging the need to improved administrative simplicity in administering the transitional reinsurance program and strongly encourages HHS to include these improved, streamlined approaches to collection of the transitional reinsurance fee in the final rule.
The Transitional Reinsurance Fee Should be Included in Plan Costs
The proposed rule indicates that HHS will include the transitional reinsurance fee will as an adjustment to incurred claims in calculating a plan’s costs for the purposes of calculating MLR. BRT supports the express inclusion of the transitional reinsurance fee in calculating a plan’s costs and respectfully requests that HHS clarify in the final rule that the transitional reinsurance fee collected against health insurance issuers and self-insured group health plans or their third party administrators is part of a plan’s costs for all purposes, not just MLR reporting and rebate requirements.
The Transitional Reinsurance Fee Should be Limited to Only the Amount Necessary
With respect to the total amount of reinsurance fees collected from all applicable entities, the proposed rule indicates that HHS interprets section 1341 of the Affordable Care Act “to specify the total contribution amounts to be collected from contributing entities (reinsurance pool) as $10 billion in 2014, $6 billion in 2015, and $4 billion in 2016.”1 BRT believes, however, that the ACA actually provides HHS with flexibility in defining the total amount that shall be collected. Section 1341(B) requires that the Secretary design the method for collection required contributions so that the aggregate contribution amount be “based on the best estimates of the NAIC.” The statute indicates that, at least at the time of drafting, the “best estimates” of the NAIC were equal to $10 billion. This $10 billion is based on an “estimate,” which is at best out of date if not entirely inaccurate, and no one currently knows the extent to which reinsurance payments will be sought by individual plans in state markets. Therefore, BRT respectfully requests that HHS determine the aggregate collection amount based on reinsurance payment requests actually received, and assess reinsurance collection amounts based on this total. For these reasons, BRT strongly supports HHS’s collection of the reinsurance contribution at the end of the year after the aggregate necessary contribution has been calculated and allocated.
The Transitional Reinsurance Fee Should be Collected at Year’s End
The proposed rule indicates that HHS intends to notify contributing entities of the reinsurance contribution amounts to be paid. Following this notification, health insurance issuers and self-insured group health plans or their third party administrators will have 30 days. BRT supports the singular annual, end of year collection of the reinsurance fee, particularly to ensure that the collection can accurately reflect the aggregate contribution necessary across all states.
We appreciate the opportunity to provide comments on the proposed rule and thank you in advance for your consideration of these comments. BRT strongly supports the increased simplification and streamlined approach to collection of the transitional reinsurance fee and strongly encourages CMS to codify the proposal making HHS singularly responsible for collection and distribution of the transitional reinsurance fee. BRT also appreciates that the transitional reinsurance fee will now be included as an adjustment to claims incurred in calculating costs for MLR reporting requirements but asks that CMS clarify that the collected reinsurance fee will be considered a plan cost for all purposes. Finally, BRT strongly encourages HHS to calculate the aggregate reinsurance collection amount based on the actual amounts request, instead of an estimated and potentially inaccurate $10 billion. To accommodate that calculation, BRT also supports a one-time, annual collection of the reinsurance fee at the end of the year. I am available at your convenience to discuss any of these matters further.
Vice President and Counsel Business Roundtable