The Transitional Reinsurance Program was established by Section 1341 of the Affordable Care Act. The intent of the program is to help stabilize premiums for coverage in the individual market during the initial years (2014 – 2016) of implementation. The program requires group insurance plans to make contributions that will be used to help support payments to individual market issuers that cover high-cost claimants. For fully-insured group health plans, the insurer is liable for the payment. For self-insured group health plans, the plan is liable for the contribution, but the plan may utilize a third-party administrator (“TPA”) or administrative-services-only contractor (“ASO”) to make the contribution on their behalf and the contribution will be considered a permissible expense of the plan for purposes of Title I of the Employee Retirement Security Act whether made directly or through a TPA/ASO.
