Effective January 1, 2014, the ACA imposes two new fees that will be collected to fund specific programs under health care reform law.
Health Insurance Tax (HIT)
This annual fee will fund premium subsidies for the health insurance marketplaces and Medicare expansion. It applies to health insurers, health maintenance organizations, and entities providing insurance under government programs (e.g., Medi-Cal).
HIT is based on insured net premiums written with first payment due in 2014. Total fee amounts increase in phases:
Transitional Reinsurance Assessment Fee
This fee supports the transitional reinsurance program established by each state to:
It applies to insured coverage and self-funded coverage and runs for three years: 2014–2016.
Patient-Centered Outcomes Research Institute (PCORI)
Already in effect is the PCORI fee, which applies to health insurance companies and plan sponsors of self-insured health plans. This fee is effective for plan or policy years ending on or after October 1, 2012, and before October 1, 2019.
The total amount is based on the average number of covered lives:
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