IRS Form 8963 (Rev. January 2020); Instructions for Form 8963 (Rev. January 2020)
The IRS has issued an updated version of Form 8963 (Report of Health Insurance Provider Information), and instructions, for reporting the health insurance providers fee for the 2020 fee year. As background, the Affordable Care Act imposed an annual fee on any entity engaged in the business of providing health insurance based on “net premiums written” with respect to United States health risks—including health insurers, but not self-insured health plans and certain other entities. The fee was suspended for fee year 2019 (see our Checkpoint article) and then repealed by the Further Consolidated Appropriations Act, 2020, effective January 1, 2021 (see our Checkpoint article). Importantly, the repeal is effective for fee years after 2020, not for fee year 2020.
For 2020, Form 8963 continues to be the IRS’s primary source of premium information, allowing the IRS to calculate each insurance provider’s proportionate share of the aggregate fee for the year, which is over $15.5 billion (see our Checkpoint article). Since Form 8963 was last filed (for the 2018 fee year), the IRS has finalized regulations requiring electronic filing by entities reporting more than $25 million in net premiums (see our Checkpoint article). As explained in the instructions and in Publication 5213 (IRS Health Insurance Provider Fee (IPF) Important Information for 2020 Fee Year), the deadline for filing the 2020 Form 8963 (paper or electronic) is April 15, 2020.
EBIA Comment: This fee is primarily of interest to health insurers since the annual health insurance providers fee is not assessed directly against employer plan sponsors, although it may affect premiums paid by employers sponsoring insured plans. After not reporting for 2019, many insurers will report electronically for this final fee year before the repeal is effective. For more information, see EBIA’s Health Care Reform manual at Section XXXVI.K (“Annual Fee on Health Insurance Providers”) and EBIA’s Self-Insured Health Plans manual at Section IV (“Why Self-Insure?”).
Contributing Editors: EBIA Staff.