Health Care Law Blog

Health Insurance Providers Beware – April 15 is Quickly Approaching

The Patient Protection and Affordable Care Act requires that certain health insurance providers pay an annual fee based on the net premiums they wrote during the preceding calendar year. The providers required to pay this fee include health insurance issuers; health maintenance organizations; certain insurance companies; insurers providing Medicare Advantage, Medicare Part D, or Medicaid coverage; and multiple employer welfare arrangements.

In order to calculate the fees, the Internal Revenue Service (“IRS”) must obtain information related to the amount of net premiums written by each health insurance provider. This is accomplished through IRS Form 8963 (Report of Health Insurance Provider Information). Health insurance providers are required to submit Form 8963 to the IRS by April 15 of each year.

This deadline should be respected by all health insurance providers. In the event a health insurance provider fails to submit its Form 8963, it may encounter penalties of $10,000, plus the lesser of $1,000 per day so long as the failure continues, or the amount of the health insurance provider fee assessed by the IRS.

Based on the information it receives from the Forms 8963, the IRS will perform a preliminary fee calculation and notify each health insurance provider of its required fee amount. The health insurance provider will then have an opportunity to review the IRS’ determination and submit an error correction report. Payment of the required fee must be made by September 30th of each year.

If you would like any assistance in completing your Form 8963 or if you have other questions related to the health insurance providers fee, please contact Mindi Johnson at mjohnson@fosterswift.com or 616.726.2252.

Categories: Compliance, Health Care Reform, Insurance, Tax