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BRT Comment Letter on Reinsurance Fee

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-9954-P
P.O. Box 8016
Baltimore, MD  21244-8016

Re: Comments in Response to CMS-9954-P; HHS Notice of Benefit and Payment Parameters for 2015

Dear Sir or Madam:

The Business Roundtable is an association of chief executive officers of leading U.S. companies.  Together, our members’ companies employ more than 16 million individuals and provide health care coverage to nearly 40 million American workers, retirees, and their families.  Business Roundtable is invested in addressing health care costs that hamper essential economic growth.  For that reason, BRT has been critically engaged on the issue of health care reform and has an interest in seeing an implementation of the Affordable Care Act (ACA) that provides employers with the flexibility they need to continue providing critical benefits to employees and their families.

This letter provides comments in response to the proposed rule entitled HHS Notice of Benefit and Payment Parameters for 2015, published on December 2, 2013.  Specifically, these comments address provisions proposed under Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment under the Affordable Care Act.  The proposed rule would make changes to final rules implementing the Transitional Reinsurance program in 2014 and establish parameters for the program in 2015.  Generally, Business Roundtable continues to be concerned about this program and the application of the fee on employers and employees who are covered through employer-sponsored coverage.  Business Roundtable is concerned with two of the proposed changes to the program: first, the newly bifurcated timing of the collections process; and second, as proposed, Business Roundtable believes that the attachment point in 2014 is exceptionally low.  For the reasons discussed below, we urge the Centers for Medicare & Medicaid Services (CMS)  to finalize the single, annual, end of year collection of the reinsurance fee as was originally established under prior final rules and maintain a 2014 attachment point that more accurately reflects current market practices.  We appreciate your consideration of these comments and look forward to working with you on developing the most efficient approach to collecting reinsurance contributions and ensuring appropriate attachment points are selected.

Timing of Reinsurance Program Contribution

Business Roundtable CEOs consistently cite rising medical care costs as a leading cost pressure.  Employers have long recognized the value of ensuring that their employees have access to high-quality health insurance and have taken many complicated steps to continue their practice of offering coverage in compliance with the ACA.  However, the continuously rising costs of health care are inhibiting job creation and damaging our ability to compete in global markets.  The added "reinsurance fee" is a per capita fee that applies only to employers offering health coverage to their employees, retirees, and their families.  Next year, this fee will total $63 per covered life - which equates to millions of dollars annually for many large employers.  This fee alone will add significantly to employers' health care costs without improving quality, creating efficiency, or resulting in better health care.  Compliance with the collection of the fee will also create additional administrative burdens for employers.

To ensure timely and efficient compliance with the collections process, many employers have taken measures to prepare for the collection of this fee.  Despite final rules being issued in March of this year, the newly proposed rule would change the collections process.  As proposed, the timing of the collections would impose additional financial and administrative burdens – effectively doubling the efforts necessary to comply with the process as initially codified – and would do so exclusively for those employers that continue to provide coverage to their employees.  To avoid imposing additional and unnecessary costs and burdens on employers, Business Roundtable urges CMS to move forward with a singular, annual collection of contributions at the end of the year, as originally codified.

Attachment Point

The final rule established a $60,000 per person per year attachment fee for 2014 under the Transitional Reinsurance program.  The proposed rule would decrease the 2014 attachment point to $45,000.  The proposed attachment point is not congruent with current market practices.  We continue to urge the Administration to reevaluate this fee, align it with comparable stop loss coverage in the public and private market place and avoid increasing the costs of employer-sponsored coverage. 

Conclusion

The Business Roundtable sincerely appreciates your consideration of these comments.  We remain committed to ensuring that employers can continue providing high-quality coverage to their employees, in compliance with the ACA, by working with CMS and other Agencies to develop business-minded, efficient, and workable regulations.  Business Roundtable believes if a fee must be collected, it should be at the end of year collection of the reinsurance fee, particularly to ensure that the collection can accurately reflect the aggregate contribution necessary across all States.  Business Roundtable also respectfully requests that CMS increase the attachment point in 2014, as codified, to more accurately reflect current market practices.  We look forward to our continued efforts with you on these matters.  I am available at your convenience to discuss any of these matters further.

Sincerely,

Gary Loveman     
Chairman, Chief Executive Officer and President
Caesars Entertainment Corporation  
Chair, Health and Retirement Committee  
Business Roundtable    

GL/mg

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