HHS mulls reinsurance fee exemption for labor unions

The U.S. Department of Health & Human Services has quietly announced it's considering exempting some labor unions and businesses from paying a temporary reinsurance fee under the healthcare reform law.

In rules issued last week the agency said certain self-insured, self-administered health plans could be exempted from the fee in 2015 and 2016, Kaiser Health News reported.

But based on the specific language HHS used, most unions and businesses maintain they wouldn't even qualify for the exemption because few of them provide both self-insured and self-administered plans. If they are eligible for the exemption, they could avoid paying a $63 fee for each covered person starting next year, reported the Associated Press.

"Our understanding is that it's not going to apply to us because of the third-party administration," Jay Lederer, spokesman for the International Union of Operating Engineers, told the AP. "If they are leaving out everybody who uses a third-party administrator to manage their health funds, it's our belief that leaves out the vast majority of plans."

And AFL-CIO President Richard Trumka said during a conference call that the language HHS used doesn't actually specify union plans will receive special treatment. "It applies to self-administered funds," whether they are union-covered plans or not, Trumka said.

Meanwhile, Republicans criticized the proposal, saying they're suspicious of HHS motives. "It certainly looks like the Obama administration is looking at a special deal for unions, which is deeply concerning given the problems that all Americans are facing due to Obamacare," said Sen. Orrin Hatch (R-Utah) the AP noted.

Insurers, for their part, support the reinsurance fee, which is meant to raise $25 billion over the next three years to help offset the costs of covering expensive and unhealthy consumers who are expected to buy policies on the health insurance exchanges. It's not clear how a partial exemption will impact that fund, the Wall Street Journal reported.

To learn more:
- here are the HHS rules
- read the Kaiser Health News article
- see the Associated Press article
- check out the Wall Street Journal article