February 23, 2016

On Feb. 16, 2016, the Connecticut Insurance Department published Bulletin HC-110 regarding the one-year moratorium on the fee on health insurance providers (called “covered entities”). The bulletin is directed toward insurers, and states that they must suspend the collection of the fee for the 2017 calendar year.

As background, PPACA instituted the fee to help fund the cost of PPACA implementation and exchanges. This fee applies to any "covered entity" engaged in the business of providing health insurance to U.S. citizens, residents and certain other persons present in the U.S. Put simply, this fee only applies to insurers, and the regulations specifically exclude self-insured plans (although it does apply to fully insured limited-scope dental, vision and retiree-only plans, which are exempt from most PPACA requirements). On Dec. 18, 2015, President Obama signed the Consolidated Appropriations Act, 2016 into law, which includes a one-year moratorium on the fee from Jan. 1, 2017, through Dec. 31, 2017.

The bulletin informs carriers that if they have approved group rates for plan years beginning in 2016 that they are directed to refile such rates for second, third and fourth quarter of 2016 to remove the fee for the portion of the plan year in 2017. For groups with plan years beginning Feb. 1, 2016, and Mar. 1, 2016, carriers are directed to provide a credit or refund of the 2017 fee to the employer group in the 2016 plan year. Filings should be submitted no later than Mar. 1, 2016.

While the suspension of this tax does not require any employer action, employers may see a decrease in costs since most insurers passed the fee onto the plan through rate increases.

Bulletin HC-109 »