The Internal Revenue Service (IRS) will once again expect the Health Insurance Tax (HIT) remittances from health insurance carriers for the 2019 plan years – to be paid in 2020. The Affordable Care Act (ACA) imposes a fee on each covered entity engaged in the business of providing health insurance for United States health risks. The first filings were due from covered entities by April 15, 2014 and the first fees were due September 30, 2014. There was a moratorium on the fee for 2017 and there is a suspension on the fee for 2019. Plan sponsors are not a covered entity required to remit this tax, rather, the tax will be reflect in carrier premiums based on the amount of net premiums for that carrier. For more information on the HIT, see: https://www.irs.gov/businesses/corporations/affordable-care-act-provision-9010
See the Leavitt Group article on the 2017 HIT reinstatement.
Q1: Under the 2019 moratorium, is there a health insurance provider fee in 2019?
No. There is no fee in 2019.
Q2: Must Form 8963 be filed in the 2019 fee year?
No. Do not file Form 8963 in the 2019 fee year.
Q3: Do the 2017 or 2019 moratoriums affect the 2018 fee year?
No. Form 8963 for the 2018 fee year is due by April 17, 2018. The 2018 applicable amount is $14.3 billion and any required payment is due on September 30, 2018.
Q4: Does the 2019 moratorium apply to fee year 2019 or data year 2019? In other words, does the moratorium apply to (1) the fee paid in 2019 based on the 2018 data year or (2) to the fee paid in 2020 based on the 2019 data year?
The 2019 moratorium applies to fee year 2019. Therefore, no fee will be due in fee year 2019 based on the 2018 data year.
No Action required
Some are estimating that the HIT is expected to raise premiums by 2.2%—although these nubmers hane not been confirmed in regulations and the exact amount will vary depending on the insurance carrier’s prior year’s net annual premiums. Although this tax could see another delay, plan sponsors should be prepared for the additional cost reflected in their 2020 premiums.
This information is intended as educational only. Consult your legal/tax professional for all details related to your compliance requirements.