Be Aware of Hidden Obamacare Fees Effective in 2014

Be on the lookout for these three “hidden” fees being added to the cost of health insurance plans due to Obamacare.

Health Insurance Industry Fee

This is being collected on all FULLY INSURED Medical and Dental plans effective 1/1/2014. The fee varies depending on the market share of each carrier, but the typical cost is 1% of the total premium on HMO plans and 2% of total premium on your PPO plans. For example, if your premium for your medical insurance is $500,000 per year and the cost for your dental program is $100,000, then the total additional fee is $12,000 if you have PPO plans.  This is being collected by your insurance carrier and is payable to the IRS.

Reinsurance Assessment

This fee is part of a complex risk assessment system put in place to stabilize premium in the individual market. It is temporary, with fees collected in 2014, 2015 and 2016. The fee is $63 per enrollee (member) per year on all fully- insured and self-insured plans. This fee is payable to The Department of Health and Human Services (HHS). It is paid by the insurance carrier for fully insured plans and by the plan sponsor for self-funded plans.

Patient-Centered Outcomes Research Institute (PCORI) Comparative Effectiveness Research Fee

The ACA established a Patient -Centered Outcomes Research Institute that is charged with identifying the effectiveness of various forms of medical treatment. Monies collected are used to fund research on the effectiveness of medical treatments and prescription drugs. The fees are $1 per covered life for FY2013, $2 per covered life for FY2014 and FY2015-2019 will be indexed. This is an annual fee on all fully-insured and self-insured plans. Insurers and plan sponsors are responsible for paying the fee which is treated like an excise tax by the IRS. A federal excise tax return (Form 720) must be field by July 31 of the calendar year immediately following the last day of the plan year. In the case of fully-insured coverage, the insurance carrier is responsible for filing and paying the PCORI fee and will be rolled into the premium. As the plan sponsor, self-funded employers must complete form 720 and pay the fee directly to the IRS.


Contact Block (Blog)

Recent Comments

    Newsletter Signup

    Signup to start receiving the latest newsletters from StopLoss right to your email.
    Stay up to date on insurance trends and insights.

    Back to Top

    In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

    From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

    In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

    In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

    The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

    6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

    In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

    In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

    Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

    In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

    In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

    From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.