Filed Under:Health Insurance, Individual Health

PPACA accounting still hazy

(AP photo/PGR-HO)
(AP photo/PGR-HO)

Insurance regulators are just starting to figure out the accounting rules for a core Patient Protection and Affordable Care Act component – a collection of three PPACA risk management programs.

The Statutory Accounting Principles Working Group, a panel at the National Association of Insurance Commissioners, has posted a draft of an “information document” summarizing what regulators have figured out about the “risk-sharing provisions” of PPACA.

The document explains how the drafters think carriers will account for the “Three R’s” – a collection of three PPACA risk management programs that could lead to carriers either paying or receiving tens of billions of dollars in cash over the next few years.

Comments are due Dec. 3.

Two of them, a reinsurance program and a risk corridor program, are supposed to be temporary. They’re supposed to use cash from some carriers to help others end up getting more than their fair share of individual or small-group health insurance claims as a result of PPACA.

The third program – a risk adjustment program – is supposed to provide permanent insurer-funded protection against PPACA-related adverse selection.

The Financial Accounting Standards Board, the body that usually oversees U.S. accounting rules, “has not provided any unique guidance on this subject,” the informational document drafters say in a footnote.

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Originally published on BenefitsPro. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Nichole Morford

Nichole Morford
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