Fees, Fees and More Fees! The What and Why

There are several fees that are added into your health insurance premium every month. These fees were designed to help pay for the costs of Healthcare Reform.  Here is a breakdown of some of these fees and why they exist.

Patient-Centered Outcomes Research Institute (PCORI) Fee:

• $1 per member per year (includes spouse & children)
• Started in 2012 
• Fee goes to a Trust Fund that will fund research that evaluates and compares health outcomes and clinical effectiveness, risks, and benefits of two or more medical treatments and/or services
• Applies to fully insured groups, self funded groups and individuals

Transitional Reinsurance Fee (AKA Comparative Effectiveness Research Fee)

• Approximately $5.25 per member per month (includes spouse & children)
• Given to individual health insurance companies that have a disproportionate amount of insureds with high medical costs.
• Cost reduces every year from 2014-2016
  
• Applies to fully insured groups, self funded groups and individuals

Health Insurance Marketplace User Fee

• 3.5% of premium
• Pays for access to the marketplace funded by the federal government. State run Marketplaces can set their own fee. 
• Fee applies to all plans available on and off of the marketplace.
• Applies to fully insured small groups and individuals

Risk Adjustment Fee

• $0.08 per member per month
• Help spread the financial risk of health insurance issuers in the individual and small-group markets more evenly 
• Will go into effect in 2014 and is permanent.
• Fee applies to all plans available on and off of the marketplace.
• Applies to fully insured small groups and individuals.

Other Fees & Taxes Related to Healthcare Reform include:

• Extra 0.9% Medicare payroll tax on wages over $200,000
• Additional unearned income tax 3.8%
• Flexible spending accounts have a $2,500 maximum contribution
• Some states have an added premium tax  (Ohio's is 1.4%)
• Tax on indoor tanning