"From: Vigue, Mary
Sent: Tuesday, March 11, 2014 5:52 PM
To: Westmoreland, Jim
Cc: Hammond, Connie
Subject: Healthcare Reform Transition Fee
At yesterday’s work session, Council asked about the impact of the Healthcare Reform Act. Below is some information on the two types of payments that the City will be responsible for.
The City has two types of ACA (Health Reform) payments – one is to fund a Patient-Centered Outcome Research Institute (PCORI) (Government review panel to determine who should receive treatment) and the Transitional Reinsurance Program Fee (interim funding of healthcare exchanges).
The PCORI is due by July 31 each year and is paid using IRS Form 720 (Quarterly Federal Excise Tax Return). The fee was $1 for July 2013 and paid on each covered member in our plans (employees and dependents). Our 2013 fee was $6,702. The fee for 2014 (due 7/31/14) will be $2 per head based on an updated head count which will be determined for this year, so we can count on this fee being a little more than double last year or approximately $13,500. This is built into the Employee Insurance Fund proposed budget for 14-15.
The other fee is the Reinsurance fee which will be paid for the first time in 2015. This rate is $63 per covered head (reported in November 2014) payable in 2015; the following year the fee will be $44 per covered head payable in 2016; and $26 payable during 2017. Regulations keep changing and these numbers bounce around a little but there is no hint that they will delay our payments for these fees. Based on current headcounts staff estimates the reinsurance fee to be $450,000 to $500,000, payable during 2015. The Department of Health and Human Services has proposed an installment method which would require about 84% of the payment in January and the remainder during the 4th quarter of 2015. Again, these numbers are estimates and they are included in the 14-15 budget projections for the Employee Insurance Fund.
I hope this helps answer your questions. While I’ve given estimated numbers, please don’t latch on to them as concrete. The administration keeps changing the rules as we go forward but at this time, this is what we see. If you have any questions, please let me know.
Interim Assistant City Manager
City Manager's Office
City of Greensboro
300 West Washington Street, Greensboro, NC 27401"