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February 11, 2014 | Benefits Management | Posted by Ascentis Thought Leadership

The Top Seven Things Every Human Resources Professional Needs to Know About Transitional Reinsurance Fees

Have you heard about the newest provision of the ACA, which began on Jan. 1, 2014?


Transitional Reinsurance Fees (TRF's) are a significant, but somewhat unpublicized funding provision took effect which impacts many employers offering health insurance to their employees. The Transitional Reinsurance Fee (“TRF”) program is, as its name implies, transitional in nature and so far applies only for tax years 2014 through 2016. Self-insured employers must pay careful attention to this new set of rules and be ready to calculate and remit their fees due under the rule later this year.


Here are the top seven things you need to know about TRF's:


  1. What it is: The Transitional Insurance Fee (TRF) program was authorized by

    § 1341 of the Affordable Care Act to help stabilize premiums in the individual healthcare market from 2014 through 2016.

  2. Who does it effect: The fee applies to all insured and self-funded “major medical” plans.
  3. Which plans are excluded: Plans excluded are: standalone prescription drug, dental or vision plans; HRA's and HSA's (even if integrated into a single HDHP); FSA's; and employee assistance programs and wellness programs.
  4. Who is counted: Participants in plans are counted (not just employees). This includes spouses and dependents of employees, excluding those enrolled in Medicare.
  5. How is it calculated: There are four methods for calculating the fee: the Actual Count Method, the Snapshot Method, the Snapshot Factor Method, and the Form 5500 Method.
  6. Is it tax deductible: The TRF has been determined to be an ordinary and necessary business expense.  It is therefore tax deductible.
  7. Can employers pass this fee on to plan participants: The fee may be passed along to plan participants, and the safest way to do so is to incorporate the fees directly into your premium rates for 2014.


To make this information easier for you to digest, Ascentis is offering you an easy way to learn about TSF's. Watch our on-demand presentation in this Health Care Reform Master Class Series and download the accompanying bulletin. In addition, you can also download our infographic guide that will help you determine how employers with an HRIS software and payroll software can use technology to comply with these requirements.


PPACA: Transitional Reinsurance Fees - Seven Facts

With more than 35 years of experience in providing Software as a Service (SaaS) solutions, Ascentis thought leaders have become a respected source for insights, tips, and innovations in the Human Capital Management (HCM) space.