Hartford Business Journal

12 Hartford Business Journal • February 29, 2016 www.HartfordBusiness.com AmericanHeartConnecticut @HeartCONN ©2016, American Heart Association. Also known as the Heart Fund. ™Go Red trademark of AHA, Red Dress trademark of DHHS. Media Sponsor Tickets/Sponsorship: http://HartfordGoRedLuncheon.ahaevents.org or call (203) 303-3325 2016 Greater Hartford Go Red For Women ® Luncheon JOY BAUER, MS, RDN, CDN Keynote Speaker Presenting Sponsor Tuesday, March 15 th Connecticut Convention Center THIS EMPOWERING EVENT will focus on women's heart health and feature a keynote speaker, inspiring stories, and a delicious heart healthy lunch. Take a seat and learn your risks for heart disease. from page 1 on medical device manufacturers, represented one of the most significant changes to Obam- acare since it was passed in 2010. Connecticut insurers have included HIP fees in their rates since they took effect in 2014, but those costs can't be included in plans active any time in 2017. That means any annual policies that took effect after Jan. 1, 2016, will be impacted. "We are anticipating the rates will decrease because the fee is being removed for the over- lap months into 2017," said Paul Lombardo, insurance actuary at the state Insurance Department, which oversees health insurer rate requests. "We view it as a positive for small and large employers in the state." It's not clear how much savings employers might reap, but an insurance industry commis- sioned study said the fees in 2017 would add as much as 3.7 percent to the average annual premium, or $270 and $250, respectively, to small- and large-group plans. The study by Oliver Wyman, commis- sioned by America's Health Insurance Plans, also said the HIP fee would increase small employer plan costs in Connecticut by an average of $302 per year over a decade, while large employer plans would see an average price increase of $283 over that time. AHIP has advocated for a full repeal of the fee. "The health insurance tax drives up the cost of coverage for millions of Americans," AHIP spokeswoman Clare Krusing said in a statement before the December vote. "Repealing or suspending this tax would be a victory for seniors, small business owners, and middle-class consumers." The fee moratorium will affect any annual employer health plans renewed after Jan. 1, 2016, because they will extend into 2017. As a result, the state Insurance Depart- ment has ordered small- and large-group insurers to recalculate any 2017 rates that were approved prior to Congress' HIP fee suspension in December. Employers who have already begun pay- ing premiums on a policy that took effect after Jan. 1 and included the HIP fee in its pricing will receive a credit from their insurer, Lombardo said. There are about 16 plans currently in effect that fall into that category. Of course, elimi- nation of the HIP fee doesn't mean employ- ers looking to renew their health plans in 2017 are guaranteed to see an overall cost decline. Many factors, from utilization trends to drug costs, affect rate cal- culations. Insurers will file rate requests this spring for plans that begin in 2017. Cost to insurers The IRS is charged with calculating the HIP fees each year, which are based on prior-year share of all health insurance premiums written. Hartford-based Aetna paid $856 million in HIP fees in 2015, and $605 million in 2014, accord- ing to its recent annual report. It's not clear what the insurer would have owed in 2017. "Aetna is working through the details and filings so that we can comply with the Insur- ance Department's [refiling request]," spokes- man Walt Cherniak said via email. While some have criticized the HIP fee for driving up insurance premiums, they did help offset the costs of expanding insurance to millions of Americans. Critics have also said the moratorium will add to the federal deficit. Meantime, there have been questions over the fee calculations. The Treasury Inspector General for Tax Administration issued a report last year that found the IRS may not be allocating the fee properly, because some insurers failed to file their market-share data on time, allowing them to avoid paying their fair share of the overall fee. n Rate relief possible in 2017 Health Insurance Premium Tax Revenues Year Revenues 2014 $8.0B 2015 $11.3B 2016 $11.3B 2017 $13.9B 2018 $14.3B S O U C E : I R S Paul Lombardo, insurance actuary, state Insurance Department ▶ ▶ ' We are anticipating the rates will decrease because the fee is being removed for the overlap months into 2017. We view it as a positive for small and large employers in the state.' Paul Lombardo, insurance actuary at the state Insurance Department

• Cover