You may or may not recall that included in the ACA was a Health Issuer Fee charged to all health carriers as a tax to pay for functions of the ACA. You may also recall that in 2017 a moratorium was placed on this tax and now with the recent shutdown bill another moratorium will occur in 2019. So that means we have this tax for 2018.
Basically any carrier who has $50 Million or more in health, dental or vision premium is assessed this fee, each in a slightly different number. The first $50 Million of annual premium is exempt.
Our carriers have handled this tax in different ways. Some bury the tax into the rates and others add it as a line item.
So until we hear further, here is how our carriers will be handling this tax:
1. Delta Dental--NO RATE IMPACT
Delta handles this tax internally so your clients will see no rate impact.
2. Kansas City Life--NO RATE IMPACT
Kansas City Life is below the $50 Million threshold so is exempt. They are in a good position because they don't have to adjust administratively each year to the changing landscape of taxes and fees in the ACA.
3. Companion Life--RATE IMPACT OF 3.5%!
Since the passing of the ACA, Companion Life decided to make the taxes and fees transparent to groups so they include them as a line item on the bill. In 2017 this line item went away and everyone's dental plans got cheaper. In 2018 unfortunately, it is coming back. Yes, we anticipate a lot of calls on this in January.
The 1/1 new business quotes do include the 3.5% however any 11/1 or 12/1 business did not. We will communicate the best we can any new business we process to ensure this is not too big a shock to groups after the New Year.
In addition, Companion sent this letter to you and this letter to your groups outlining this change.
4. Metlife--NO RATE IMPACT
Met has accounted for the ACA fees in its dental and vision rates.
5. Guardian--NO RATE IMPACT
Guardian also has accounted for these fees within its rates.
6. Eyemed--NO RATE IMPACT!