By Wolters Kluwer Editorial Staff
The IRS has issued proposed regulations regarding Health Insurance Provider Fee under Section 9010 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). One set would require electronic filing of Form 8963, Report of Health Insurance Provider Information. These amendments are proposed to apply to any covered entity reporting more than $25 million in net premiums written on any Form 8963 filed after December 31, 2017. The other set of proposed regulations would modify the current definition of "net premiums written," and are proposed to apply with respect to any fee that is due on or after September 30, 2018. (Proposed rule, 81 FR 89020, December 9, 2016; Proposed rule, 81 FR 89017, December 9, 2016).
Electronic filing. Under the Proposed rule, a covered entity (including a controlled group) reporting more than $25 million in net premiums written on a Form 8963 or corrected Form 8963 must electronically file these forms after December 31, 2017. Forms 8963 reporting $25 million or less in net premiums written are not required to be electronically filed. If a Form 8963 or corrected Form 8963 is required to be filed electronically, any subsequently filed Form 8963 filed for the same fee year must also be filed electronically, even if such subsequently filed Form 8963 reports $25 million or less in net premiums written. Failure to electronically file will be treated as a failure to file.
Net premiums written. The Proposed rule would modify the current definition of net premiums written to account for premium adjustments related to retrospectively rated contracts, computed on an accrual basis. These amounts are received from and paid to policyholders annually based on experience. Retrospectively rated contract receipts and payments do not include changes to funds or accounts that remain under the control of the covered entity, such as changes to premium stabilization reserves.
The Proposed rule clarifies that net premiums written include risk adjustment payments received and are reduced for risk adjustment charges paid. If a covered entity did not include risk adjustment payments received as direct premiums written on its Supplemental Health Care Exhibit (SHCE) or did not file an SHCE, these amounts are still part of net premiums written and must be reported as such on Form 8963. For this purpose, risk adjustment payments received and charges paid are computed on an accrual basis.
Comment sought. The Treasury Department and the IRS request comments on all aspects of the proposed rules. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time and place for the public hearing will be published in the Federal Register. Submissions should be sent to: CC:PA:LPD:PR (REG-123829-16 or REG-134438-15), room 5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044. Submissions may be also hand delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG-123829-16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, D.C., or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (indicate IRS REG-123829-16 or REG-134438-15), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044.
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