The new Patient Protection and Affordable Care Act healthinsurance fee could add about 1.7% to the cost of commercialcoverage from a profit plan in 2014.

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

Mathieu Doucet and Julia Yahnke, actuaries at Milliman, haveincluded 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 tocover part of the cost of PPACA coverage expansion provisions.

The drafters also included the fee to compensate for what somethought might be dramatic increases in health insurance companyrevenue and profit totals as a result of PPACA "sharedresponsibility" provisions that will tax many individuals who failto have what PPACA defines as being a responsible amount of healthcoverage.

The PPACA provision requires insurers – including nonprofitinsurers, privately managed Medicaid plans and private Medicareplans, but not self-insured employer plans – to pay a total of $8billion 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, theactuaries said.

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

"The application of the tax will encourage larger employers toconsider self-insurance over fully insured products," the actuariessaid.

This article was originally posted at BenefitsPro.com, a sister siteof Credit Union Times.