Beginning March 29: To help insurance agents and financial advisors like you guide clients in making critical wealth, health and life decisions we will be moving our coverage from to

Our comprehensive coverage will help you expand your knowledge base and adapt a new client-centric approach that incorporates both insurance and investment solutions.

ThinkAdvisor’s new Life/Health channel is your roadmap to thriving in a disrupted environment.


Filed Under:Markets, Employee Benefits

Milliman: PPACA fee may raise premiums 2 percent

The new Patient Protection and Affordable Care Act (PPACA) health insurance fee could add about 1.7 percent to the cost of commercial coverage from a for-profit plan in 2014.

For coverage from a nonprofit plan, the fee could increase the cost an average of about 1.5 percent.

Mathieu Doucet and Julia Yahnke, actuaries at Milliman, have included those projections in analysis of the effects of the fee on the U.S. health insurance industry.

The drafters of PPACA included the industry fee in an effort to cover part of the cost of PPACA coverage expansion provisions.

The drafters also included the fee to compensate for what some thought might be dramatic increases in health insurance company revenue and profit totals as a result of PPACA "shared responsibility" provisions that will tax many individuals who fail to have what PPACA defines as being a responsible amount of health coverage.

The PPACA provision requires insurers -- including nonprofit insurers, privately managed Medicaid plans and private Medicare plans, but not self-insured employer plans -- to pay a total of $8 billion in PPACA fees in 2014.

The industry total is supposed to rise to $14.3 billion by 2018, then increase at a rate tied to the rate of premium growth, the actuaries said.

The impact will be greater on for-profit insurers than on nonprofit insurers, because a carrier cannot deduct the cost of the fee from its taxable income, the actuaries said. 

"The application of the tax will encourage larger employers to consider self-insurance over fully insured products," the actuaries said. 

See also:

Featured Video

Most Recent Videos

Behind the scenes with Vicki Gunvalson [VIDEO]


In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI


Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's


An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Protesters Disrupt WellPoint Annual Meeting


Hecklers call for more disclosures of information about political contributions.

Related resources

More Resources


Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.