The Internal Revenue Service is asking for comments on a draft of the instructions for paying a new Patient Protection and Affordable Care Act tax.
The draft instructions, for IRS Form 8963, are supposed to help U.S. health insurance providers pay the annual fee on health insurance providers required by Section 9010 of PPACA. PPACA Section 9010 requires health insurance providers, or "covered entities," to pay a total of $8 billion for the 2014 "data year" and $11.3 billion for the 2015 data year.
PPACA drafters created the fee to help pay for the cost of implementing PPACA, and because of drafters' desire to keep the new individual health insurance ownership mandate from creating a windfall for private health insurers.
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America's Health Insurance Plans has been lobbying to persuade Congress to eliminate the tax. AHIP argues that the fee will backfire, by increasing insurers' costs, leading to higher rates, and discouraging consumers from buying health coverage.
A panel at the National Association of Insurance Commissioners developed the PPACA Section 9010 fee accounting guidelines.
In the new instructions, the IRS says a company that must file a Form 8963 generally will be a "covered entity that provided health insurance for any United States health risk" in 2014. For purposes of this fee, the IRS defines "covered entity" to include a health maintenance organization; an insurer that provides health insurance through Medicare Advantage, Medicare Part prescription drug or Medicaid programs; and a non-fully insured multiple employer welfare arrangement (MEWA).
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
