Taxes and fees estimates

On January 1, 2014, major provisions of the Patient Protection and Affordable Care Act (PPACA) that expand access to health coverage for the uninsured will take effect, along with new taxes and fees included in the law. In Michigan, an additional health insurance tax is already in effect. Following is a summary of how HAP is estimating these federal and state assessments for groups of 2 to 50 eligible employees.

FAQs

Since the PCORI Fee is embedded, does HAP file the form 720 (Quarterly Federal Excise Tax Return), or does the employer need to file it? If HAP files the form, can we get a copy of the filing for our group?
HAP will file form 720 for all fully-insured members enrolled with HAP and Alliance. This filing will not be broken down by employer group, thus we are not able to provide a copy of the filing at the group level.
How did HAP calculate the Health Insurance Premium Tax percentage for 2014 for HMO groups?
The final premium tax for HMO accounts for 2014 is 1.15 percent, which equates to a per member per month (PMPM) of approximately $4.46 on average. This was calculated based on HAP’s estimated fee of $14.7 million (50 percent of full fee due to not-for-profit status), which then is broken out between our Medicare and Commercial book of business. For Commercial, based on our projected 2014 premium platform and associated insured member months, we calculate a needed fee of $10.9 million, which results in a charge of 1.15 percent, or $4.46 PMPM.
How did HAP calculate the Health Insurance Premium Tax percentage for 2014 for Alliance groups?
The final premium tax for Alliance accounts for 2014 is 1.55 percent, which equates to a per member per month (PMPM) of approximately $3.59 on average. This was calculated based on the Alliance estimated fee of $2.7 million, which then is broken out between our Medicare and Commercial book of business. For Commercial, based on our projected 2014 premium platform and associated insured member months, we calculate a needed fee of $2.1 million, which results in a charge of 1.55 percent, or $3.59 PMPM.

For small groups, will the taxes and fees be embedded in the renewal rate, or charged as separate line items?

HAP will administer taxes and fees for small groups based on plan type, as shown in the table below:

Plan Type	Embedded	Separate Line Item	Not Charged
Transitional Plans (Plans renewed in 2013 that extend into 2014 and are not grandfathered)	PCORI Fee*	Premium Tax HICCA	Exchange User Fee
Grandfathered	PCORI Fee*	Premium Tax HICCA	Exchange User Fee
Essential Health Benefits Plans (PPACA-compliant)	PCORI Fee* Premium Tax Exchange User Fee HICCA

* The PCORI Fee became effective in 2012.

When do these taxes and fees go into effect?
The HICCA Tax and PCORI Fee are already in effect. All other taxes and fees for small groups are effective on Jaunary 1, 2014 or upon renewal.
Does the Exchange User Fee apply only to plans purchased through the Health Insurance Marketplace?
All Essential Health Benefit (PPACA-compliant) plans will be subject to the Exchange User Fee, regardless of whether they are purchased on- or off-exchange (Health Insurance Marketplace). The Exchange User Fee pays for access to marketplaces facilitated by the federal government, and is spread across all individual and small group products effective on or after January 1, 2014.