AAR Supports H.R. 3498 – Repealing the Crippling 2014 Tax on National Railroad Healthcare Plans

The Association of American Railroads (AAR) recently offered its support for H.R. 3489, legislation introduced to repeal the funding mechanism for the Transitional Reinsurance Program authorized by the Affordable Care Act. The fees levied to support the Program provide an unnecessary financial burden to the rail sector with no corresponding benefit.

The Transitional Reinsurance Program is expected to collect a total of $25 billion in fees over a three-year period beginning in January 2014. They will be assessed at a level of $63 per covered individual in 2014 and an estimated level of $42 in 2015 and $26.50 in 2016.

National railroad healthcare plans cover more than 400,000 individuals at an annual cost to the railroads of more than $2 billion. UnitedHealthcare estimates that reinsurance fees will cost the railroad sector an additional $27 million in 2014, $19 million in 2015 and $11 million in 2016. States are also permitted to set up their own supplemental reinsurance programs and will be allowed to assess additional fees.

Click here to read the full release from AAR.