The Department of Health and Human Services (HHS) administers the 3-year transitional reinsurance program established under section 1341 of the Patient Protection and Affordable Care Act. The program, which is financed by statutorily required contributions from participating health insurance issuers and group health plans, makes payments to eligible issuers, to stabilize health insurance premiums and encourage issuer participation in the health insurance markets. Section 1341 designates a specified amount of collections from issuers for reinsurance payments and also directs the deposit of a specified amount of collections in the general fund of the United States Treasury (Treasury). HHS asserts that when collections fall short of the amounts specified in statute the agency has authority to allocate all collections for reinsurance payments, making deposits in the Treasury only if collections reach the amounts specified for reinsurance payments in section 1341. HHS lacks authority to ignore the statute’s directive to deposit amounts from collections under the transitional reinsurance program in the Treasury and is required to collect and deposit amounts for the Treasury, regardless of whether its collections fall short of the amounts specified in statute for reinsurance payments. HHS may not use amounts collected for the Treasury to make reinsurance payments.
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