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Form 8963: IRS posts new health insurance provider instructions draft

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The Internal Revenue Service (IRS) has posted a new draft of the 2016 instructions for Form 8963, the form health insurance providers use to report net health premium revenue.

The IRS is supposed to use the form to calculate a provider’s “health insurance provider fee” tax obligations under Section 9010 of the Patient Protection and Affordable Care Act of 2010 (PPACA).

The form for the 2015 “data year,” or year when the coverage was provided, will be due April 18, 2016.

A provider can submit the form electronically or mail it. In the new draft instructions, IRS officials have added a tip recommending that a provider that mails the form to the IRS also fax a copy of the form to a toll-free number.

Officials have also:

  • Added a cautionary note about entity addresses. “Do not provide a P.O. Box,” officials warn.

  • Kept an instruction that advises a covered entity to, “Enter a street address where you can receive overnight deliveries.”

  • Added a note telling issuers that the IRS will provide separate guidance on treatment of direct premiums written for expatriate health plans.

PPACA drafters created the health insurance provider fee system because of a belief that PPACA would increase the providers’ enrollment and revenue. PPACA drafters saw the fee provision as a way to use part of insurers’ new PPACA-related revenue to pay for PPACA coverage expansion programs.

See also: Baucus Puts Bill In Play

The types of “covered entities” required to file the form include health insurance issuers, health maintenance organizations (HMOs), providers of private Medicare and Medicaid plans, and multiple employer welfare arrangements (MEWAs) that are not fully insured.

The “net premiums written” total includes health insurance and reinsurance premiums. It excludes reinsurance ceded, ceding commissions and PPACA medical loss ratio (MLR) rebate payments.

“All information on this form is subject to public disclosure,” the IRS says in the form instructions. “Do not include personal information other than that requested by this form.”

See also: 3 things you CAN’T know about IRS PPACA problems

The IRS began requiring coverage providers to file 8963 forms in early 2015, for the 2014 data year. About 30 percent of the providers filed the forms late, according to the Treasury Inspector General for Tax Administration (TIGTA).

See also: Watchdog: 30% of health insurers filed PPACA fee forms late


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