Individuals and employers who purchase fully insured health insurance coverage should see the impact of the 2016 one-year moratorium on the national health insurance tax (HIT) in their 2017 premiums, according to CMS. Right now, this tax costs every family in a fully insured health plan about $500 a year in additional premiums. In December, as part of the Consolidated Appropriations Act of 2016, the tax was suspended for one year. However, consumers did not see an immediate impact because the 2016 tax is not actually paid until 2017. Filed and approved 2016 premium rates include the cost of the tax for 2015, which carriers still have to pay. However, with guidance issued on February 29, CMS has put carriers offering fully insured group and individual coverage on notice that they expect to see a significant impact on 2017 rates that will be filed and approved this spring/early summer, stating: “Because the fee is not being collected for the 2017 fee year, administrative costs for plans in all impacted markets are expected to be adjusted appropriately to account for the moratorium.”
Agents representing non-calendar-year plans should be sure to consider the moratorium when working on renewals over the next few months. It may be more difficult for small groups with early 2016 renewals to fully see the impact on their 2016-2017 rates, but large-group non-calendar-year employer plans that span months of both 2016 and 2017 should be sure to ask to see and realize the rate impact on their 2017 months of coverage during their 2016 renewal cycle. We’ve already heard some stories about huge discounts on 2017 premiums due to the tax moratorium. If you have a client in this situation, be sure to let us know. Our Stop The HIT Coalition is working hard to repeal the tax permanently and real-life examples of profound employer relief will help our cause on the Hill!