Final regulations - Fees imposed with respect to health insurance, health plans 

December 5: The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9602) to implement and provide guidance on “fees” imposed by the Patient Protection and Affordable Care Act on issuers of certain health insurance policies and plan sponsors of certain self-insured health plans.

The fees are to fund the Patient-Centered Outcomes Research Trust Fund.


Today’s final regulations adopt regulations that were proposed in April 2012, with “certain modifications.”


The final regulations apply to policy and plan years ending on or after October 1, 2012, and before October 1, 2019.


Read the final regulations: T.D. 9602 [PDF 171 KB]

Background

In April 2012, the Treasury Department and IRS issued proposed regulations (REG-136008-11) under sections 4375 and 4376—that impose fees on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans—and under section 4377—that contains special rules that apply to these issuers and plan sponsors with respect to these fees.


See TaxNewsFlash-United States: Proposed regulations on fees imposed with respect to health insurance, health plans

Final regulations

The preamble to the final regulations discusses changes that were not adopted in response to comments made concerning the proposed regulations, and changes that were adopted. Among the changes adopted by the final regulations are the following:


  • A specified health insurance policy does not include any insurance policy to the extent that the policy provides for an employee assistance program (EAP), disease management program, or wellness program, if the program does not provide significant benefits in the nature of medical care or treatment.
  • The fee is applied to specified health insurance policies or applicable self-insured health plans that provide accident and health coverage to retirees, including retiree-only policies and plans.
  • Continuation coverage (i.e., COBRA) must be taken into account in determining the fee, unless the arrangement is otherwise excluded.
  • Additional examples are provided to clarify the application of the fee to a health reimbursement arrangement (HRA) or similar plan.
  • The final regulations clarify that the term “applicable self-insured health plan” does not include a self-insured plan if the facts and circumstances show that the self-insured plan was designed specifically to cover primarily employees who are working and residing outside of the United States.
  • In recognizing the need for flexibility but also the need to avoid permitting issuers and plan sponsors to pick the most advantageous dates, the final regulations provide rules for an issuer or a plan sponsor that uses the “snapshot method.”

The final regulations will be published in the Federal Register on Thursday, December 6, 2012.



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