Pension & Benefits News IRS releases applicable amount for 2020 fee year for health insurance providers
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Tuesday, September 10, 2019

IRS releases applicable amount for 2020 fee year for health insurance providers

By Pension and Benefits Editorial Staff

The IRS has released a notice that provides the applicable amount for the fee imposed by Section 9010 of the Patient Protection and Affordable Care Act (ACA) for the 2020 fee year. The 2020 applicable amount is $15,522,820,037. The 2020 applicable amount is determined by multiplying the fee for the 2018 base year (14,300,000,000) by the premium adjustment percentage for 2020 (1.0855118907), rounded to the nearest dollar.

Section 9010 of the ACA, as amended by Section 10905 of ACA, and as further amended by Section 1406 of the Health Care and Education Reconciliation Act of 2010, imposes an annual fee on covered entities engaged in the business of providing health insurance for United States health risks. The fee is a fixed amount (applicable amount) allocated among all covered entities in proportion to their relative market share as determined by each entity’s net premiums written for the data year, which is the year immediately preceding the year in which the fee is paid (the year in which the fee is paid is the fee year). The fee was suspended in 2019.

SOURCE: Notice 2019-50, I.R.B. 2019-37, September 9, 2019.

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