IRS Announces Fees on Health Insurers
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Tim Jarvis
Mar 12, 2013, 4:22:42 PM3/12/13
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Article Title: IRS Announces Fees on Health Insurers
Author: Tim Jarvis
Word Count: 525
Article URL: http://www.isnare.com/?aid=1823781&ca=Finances
Format: 64cpl
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On March 1, 2013 the Internal Revenue Service (IRS) issued its proposal to levy fees on health insurance carriers. The new fees or excise tax are expected to raise over $100 billion over 10 years beginning in 2014. An excise tax is a tax charged on a specific product that is applied by an intermediary and then paid to the government.
The Affordable Care Act (ACA) in section 9010 authorized the IRS to collect a Health Insurance Provider Fee from health insurance carriers. Comments regarding the proposal must be received by the IRS by June 3, 2013. A public hearing to take testimony on the proposal is scheduled for June 21, 2013.
The fee will be imposed on companies engaged in providing health insurance in the United States with some exceptions. Texas health insurance plans involved in providing coverage for accident only, disability only, disease specific, hospital indemnity, long-term care, or Medicare Supplement coverage are excluded from the fee. Self-insured employer plans and governmental entities are also excluded from the fee.
Educational institutions that offer health insurance for their students will not be subject to the fee. IRS guidelines indicate that since the educational institution uses the premiums collected to purchase health insurance from an unrelated insurance carrier, the unrelated insurance carrier will responsible for paying the excise tax.
The fee will not be assessed on Texas health insurance carriers with aggregate net premiums under $25 million. For health insurance carriers with premiums between $25 million and $50 million, only 50 percent of premiums will be subject to the excise tax. The excise tax will be charged at 100% for carriers with aggregate premiums greater than $50 million.
The fee is expected to raise $8 billion in calendar year 2014, $11.3 billion in calendar years 2015 and 2016, $13.9 billion for calendar year 2017 and $14.3 billion for calendar year 2018. The fee beginning in 2019 will be based on the prior year and increased by the rate of premium growth. Health insurance carriers that fail to pay the fee will be subject to a penalty of $10,000 in addition to the lesser of $1,000 per day that the fee was not paid or the amount of the fee for which the report was required.
America�s Health Insurance Plans (AHIP), the carrier trade group, strongly opposed the new rule stating that the cost will be passed on to the consumers through higher premiums. The Congressional Budget Office has confirmed the claim made by AHIP.
�Imposing a new sales tax on Texas health insurance will add a financial burden on families and employers at a time when they can least afford it,� AHIP President and CEO Karen Ignagni said Friday. �This tax alone will mean that next year an individual purchasing coverage on his or her own will pay $110 in higher premiums, small businesses will pay an additional $360 for each family they cover, seniors enrolled in Medicare Advantage will face $220 in reduced benefits and higher out-of-pocket costs, and state Medicaid managed care plans will incur an additional $80 in costs for each person enrolled.�
Legislation to repeal the fee has been recently introduced by Reps. Charles Boustany, R-La., and Jim Matheson, D-Utah, and is strongly supported by AHIP.
About The Author: Tim Jarvis is a licensed Texas health insurance agent with vast knowledge of the Individual health insurance market in Texas. More Texas health insurance information can be found at http://www.texasplans.com
Please use the HTML version of this article at:
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Message delivered directly to members of the group:
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*****************************************************************
Please consider this free-reprint article written by:
Tim Jarvis
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=1823781
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=1823781
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: IRS Announces Fees on Health Insurers
Author: Tim Jarvis
Word Count: 525
Article URL: http://www.isnare.com/?aid=1823781&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=1823781
Easy Publish Tool: http://www.isnare.com/html.php?aid=1823781
*********************** ARTICLE START ***********************
On March 1, 2013 the Internal Revenue Service (IRS) issued its proposal to levy fees on health insurance carriers. The new fees or excise tax are expected to raise over $100 billion over 10 years beginning in 2014. An excise tax is a tax charged on a specific product that is applied by an intermediary and then paid to the government.
The Affordable Care Act (ACA) in section 9010 authorized the IRS to collect a Health Insurance Provider Fee from health insurance carriers. Comments regarding the proposal must be received by the IRS by June 3, 2013. A public hearing to take testimony on the proposal is scheduled for June 21, 2013.
The fee will be imposed on companies engaged in providing health insurance in the United States with some exceptions. Texas health insurance plans involved in providing coverage for accident only, disability only, disease specific, hospital indemnity, long-term care, or Medicare Supplement coverage are excluded from the fee. Self-insured employer plans and governmental entities are also excluded from the fee.
Educational institutions that offer health insurance for their students will not be subject to the fee. IRS guidelines indicate that since the educational institution uses the premiums collected to purchase health insurance from an unrelated insurance carrier, the unrelated insurance carrier will responsible for paying the excise tax.
The fee will not be assessed on Texas health insurance carriers with aggregate net premiums under $25 million. For health insurance carriers with premiums between $25 million and $50 million, only 50 percent of premiums will be subject to the excise tax. The excise tax will be charged at 100% for carriers with aggregate premiums greater than $50 million.
The fee is expected to raise $8 billion in calendar year 2014, $11.3 billion in calendar years 2015 and 2016, $13.9 billion for calendar year 2017 and $14.3 billion for calendar year 2018. The fee beginning in 2019 will be based on the prior year and increased by the rate of premium growth. Health insurance carriers that fail to pay the fee will be subject to a penalty of $10,000 in addition to the lesser of $1,000 per day that the fee was not paid or the amount of the fee for which the report was required.
America�s Health Insurance Plans (AHIP), the carrier trade group, strongly opposed the new rule stating that the cost will be passed on to the consumers through higher premiums. The Congressional Budget Office has confirmed the claim made by AHIP.
�Imposing a new sales tax on Texas health insurance will add a financial burden on families and employers at a time when they can least afford it,� AHIP President and CEO Karen Ignagni said Friday. �This tax alone will mean that next year an individual purchasing coverage on his or her own will pay $110 in higher premiums, small businesses will pay an additional $360 for each family they cover, seniors enrolled in Medicare Advantage will face $220 in reduced benefits and higher out-of-pocket costs, and state Medicaid managed care plans will incur an additional $80 in costs for each person enrolled.�
Legislation to repeal the fee has been recently introduced by Reps. Charles Boustany, R-La., and Jim Matheson, D-Utah, and is strongly supported by AHIP.
About The Author: Tim Jarvis is a licensed Texas health insurance agent with vast knowledge of the Individual health insurance market in Texas. More Texas health insurance information can be found at http://www.texasplans.com
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=1823781
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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