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Transitional Reinsurance Program: April 30 Deadline for Refund Requests Looms

CMS Guidance: Transitional Reinsurance Program – Timing of Contributions Refund Requests Due to Annual Enrollment Count Misreporting (Apr. 14, 2015)

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Visit the Health Care Reform Community on Checkpoint to join the discussion on this development (for Checkpoint subscribers to EBIA’s Health Care Reform manual).

CMS has issued important guidance on the timing of refund requests by contributing entities that misreported annual enrollment counts under the transitional reinsurance program for 2014. In general, misreporting can be corrected by simply refiling. But, according to the guidance, a deadline of April 30, 2015 or 90 days after the date of the original submission, whichever is later, applies to refund requests relating to misreported annual enrollment counts for the 2014 year. (For the 2015 and 2016 years, however, the April 30 alternative will not apply, and refund requests resulting from annual enrollment count misreporting must be submitted within 90 days from the date of the form submission.)

As background, contributing entities—health insurers and self-insured health plans—were required to self-report their 2014 enrollment count and schedule payments by an extended deadline of December 5, 2014 on an online form (see our article). The form auto-calculates the annual contribution amount based on the required annual contribution rate ($63 per covered life for 2014). According to the guidance, CMS is aware that some contributing entities may have misreported their 2014 enrollment count by misapplying an allowed regulatory counting method or by including individuals who are exempt, potentially resulting in an overpayment. It is important to note that the announced deadlines are not applicable when a contributing entity requests a refund because it paid contributions more than once for the same covered life. In addition, a contributing entity that correctly applies one of the counting methods cannot request to change its annual enrollment count and associated payments after the reporting deadline for the applicable year (although counting methods may be changed for subsequent years).

EBIA Comment: It is not completely clear whether the announced deadlines are limited to the two types of misreporting cited in the guidance (i.e., misapplication of a counting method and inclusion of exempt individuals). But with the April 30 deadline just around the corner, self-insured plan sponsors and insurers should verify the accuracy of the 2014 enrollment count submitted to CMS and make a prompt request for any refund that may be owed due to an overpayment. Contributing entities should also keep in mind the requirement to maintain records relating to reinsurance contributions (including substantiation for the enrollment count submitted) for at least ten years (see our article). HHS may audit a contributing entity to assess its compliance with the calculation of reinsurance contributions. For more information, see EBIA’s Health Care Reform manual at Section XXXVI.I (“Required Contributions Toward Reinsurance Payments”) and EBIA’s Self-Insured Health Plans manual at Section VI.H.4 (“Required Contributions Toward Reinsurance Payments”).

Contributing Editors: EBIA Staff.

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