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Statutory Text

SEC. 9010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.
(a) IMPOSITION OF FEE.—
(1) IN GENERAL.—Each covered entity engaged in the business
of providing health insurance shall pay to the Secretary
not later than the annual payment date of each calendar year
beginning after 2013 a fee in an amount determined under
subsection (b). Amended by section 10905(f)(1) and section
1406(a)(1) of HCERA
(2) ANNUAL PAYMENT DATE.—For purposes of this section,
the term ‘‘annual payment date’’ means with respect to any
calendar year the date determined by the Secretary, but in no
event later than September 30 of such calendar year.
(b) DETERMINATION OF FEE AMOUNT.—Replaced by section
10905(b)
(1) IN GENERAL.—With respect to each covered entity, the
fee under this section for any calendar year shall be equal to
an amount that bears the same ratio to the applicable amount
as—
(A) the covered entity’s net premiums written with respect
to health insurance for any United States health risk
that are taken into account during the preceding calendar
year, bears to
(B) the aggregate net premiums written with respect
to such health insurance of all covered entities that are
taken into account during such preceding calendar year.
(2) AMOUNTS TAKEN INTO ACCOUNT.—For purposes of paragraph
(1)—As revised by section 1406(a)(2) of HCERA
(A) IN GENERAL.—The net premiums written with respect
to health insurance for any United States health risk
that are taken into account during any calendar year with
respect to any covered entity shall be determined in accordance
with the following table:
With respect to a covered entity’s net premiums written
during the calendar year that are:
The percentage of net
premiums written that are
taken into account is:
Not more than $25,000,000 …………………………………. 0 percent
More than $25,000,000 but not more than
$50,000,000.
50 percent
More than $50,000,000 ……………………………………….. 100 percent.
(B) PARTIAL EXCLUSION FOR CERTAIN EXEMPT ACTIVITIES.—
After the application of subparagraph (A), only 50
percent of the remaining net premiums written with respect
to health insurance for any United States health risk
that are attributable to the activities (other than activities
of an unrelated trade or business as defined in section 513
of the Internal Revenue Code of 1986) of any covered entity
qualifying under paragraph (3), (4), (26), or (29) of section
501(c) of such Code and exempt from tax under section
501(a) of such Code shall be taken into account.
(3) SECRETARIAL DETERMINATION.—The Secretary shall calculate
the amount of each covered entity’s fee for any calendar
year under paragraph (1). In calculating such amount, the Secretary
shall determine such covered entity’s net premiums
written with respect to any United States health risk on the
basis of reports submitted by the covered entity under subsection
(g) and through the use of any other source of information
available to the Secretary.
(c) COVERED ENTITY.—As revised by section 1406(a)(3) of
HCERA
(1) IN GENERAL.—For purposes of this section, the term
‘‘covered entity’’ means any entity which provides health insurance
for any United States health risk during the calendar
year in which the fee under this section is due.
(2) EXCLUSION.—Such term does not include—
(A) any employer to the extent that such employer
self-insures its employees’ health risks,
(B) any governmental entity, As revised by section
10905(f)(2)
(C) any entity— Subparagraphs (C) through (E) revised
by section 10905(c) and subsequently rewritten in entirety,
including striking subparagraph (E), by section
1406(a)(3) of HCERA
(i) which is incorporated as a nonprofit corporation
under a State law,
(ii) no part of the net earnings of which inures to
the benefit of any private shareholder or individual, no
substantial part of the activities of which is carrying
on propaganda, or otherwise attempting, to influence
legislation (except as otherwise provided in section
501(h) of the Internal Revenue Code of 1986), and
which does not participate in, or intervene in (including
the publishing or distributing of statements), any
political campaign on behalf of (or in opposition to)
any candidate for public office, and
(iii) more than 80 percent of the gross revenues of
which is received from government programs that target
low-income, elderly, or disabled populations under
titles XVIII, XIX, and XXI of the Social Security Act,
and
(D) any entity which is described in section 501(c)(9)
of such Code and which is established by an entity (other
than by an employer or employers) for purposes of providing
health care benefits.
(3) CONTROLLED GROUPS.—
(A) IN GENERAL.—For purposes of this subsection, all
persons treated as a single employer under subsection (a)
or (b) of section 52 of the Internal Revenue Code of 1986
or subsection (m) or (o) of section 414 of such Code shall
be treated as a single covered entity (or employer for purposes
of paragraph (2)). Note: sentence at end should have
been inserted at end of this subparagraph
(B) INCLUSION OF FOREIGN CORPORATIONS.—For purposes
of subparagraph (A), in applying subsections (a) and
(b) of section 52 of such Code to this section, section 1563
of such Code shall be applied without regard to subsection
(b)(2)(C) thereof.
If any entity described in ƒexecuted to reflect probable intent of
amendment made by section 1406(a)(3)(C) of HCERA≈ subparagraph
(C) or (D) of paragraph (2) is treated as a covered entity
by reason of the application of the preceding sentence, the net
premiums written with respect to health insurance for any
United States health risk of such entity shall not be taken into
account for purposes of this section. Previous sentence added
by section 10905(f)(3) ‘‘at the end’’ of this paragraph; likely
placement should have been at end of subparagraph (A).
(4) JOINT AND SEVERAL LIABILITY.—øAs added by section
1406(a)(3)(D) of HCERA¿ If more than one person is liable for
payment of the fee under subsection (a) with respect to a single
covered entity by reason of the application of paragraph (3), all
such persons shall be jointly and severally liable for payment
of such fee.
(d) UNITED STATES HEALTH RISK.—For purposes of this section,
the term ‘‘United States health risk’’ means the health risk of any
individual who is—
(1) a United States citizen,
(2) a resident of the United States (within the meaning of
section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
(3) located in the United States, with respect to the period
such individual is so located.
(e) APPLICABLE AMOUNT.—Replaced by section 10905(b) and
subsequently revised by section 1306(a)(4) of HCERA For purposes
of subsection (b)(1)—
(1) YEARS BEFORE 2019.—In the case of calendar years beginning
before 2019, the applicable amount shall be determined
in accordance with the following table:
Calendar year Applicable amount
2014 ……………………………………………………………………………………….. $8,000,000,000
2015 ……………………………………………………………………………………….. $11,300,000,000
2016 ……………………………………………………………………………………….. $11,300,000,000
2017 ……………………………………………………………………………………….. $13,900,000,000
2018 ……………………………………………………………………………………….. $14,300,000,000.
(2) YEARS AFTER 2018.—In the case of any calendar year beginning
after 2018, the applicable amount shall be the applicable
amount for the preceding calendar year increased by the
rate of premium growth (within the meaning of section
36B(b)(3)(A)(ii) of the Internal Revenue Code of 1986) for such
preceding calendar year.
(f) TAX TREATMENT OF FEES.—The fees imposed by this section—
(1) for purposes of subtitle F of the Internal Revenue Code
of 1986, shall be treated as excise taxes with respect to which
only civil actions for refund under procedures of such subtitle
shall apply, and
(2) for purposes of section 275 of such Code shall be considered
to be a tax described in section 275(a)(6).
(g) REPORTING REQUIREMENT.—
(1) IN GENERAL.—Not later than the date determined by
the Secretary following the end of any calendar year, each covered
entity shall report to the Secretary, in such manner as the
Secretary prescribes, the covered entity’s net premiums written
with respect to health insurance for any United States health
risk for such calendar year. As revised by section 10904(f)(4)
(2) PENALTY FOR FAILURE TO REPORT.—
(A) IN GENERAL.—In the case of any failure to make
a report containing the information required by paragraph
(1) on the date prescribed therefor (determined with regard
to any extension of time for filing), unless it is shown that
such failure is due to reasonable cause, there shall be paid
by the covered entity failing to file such report, an amount
equal to—
(i) $10,000, plus
(ii) the lesser of—
(I) an amount equal to $1,000, multiplied by
the number of days during which such failure continues,
or
(II) the amount of the fee imposed by this section
for which such report was required.
(B) TREATMENT OF PENALTY.—The penalty imposed
under subparagraph (A)—
(i) shall be treated as a penalty for purposes of
subtitle F of the Internal Revenue Code of 1986,
(ii) shall be paid on notice and demand by the Secretary
and in the same manner as tax under such
Code, and
(iii) with respect to which only civil actions for refund
under procedures of such subtitle F shall apply.
(3) ACCURACY-RELATED PENALTY.—As added by section
1406(a)(5) of HCERA
(A) IN GENERAL.—In the case of any understatement of
a covered entity’s net premiums written with respect to
health insurance for any United States health risk for any
calendar year, there shall be paid by the covered entity
making such understatement, an amount equal to the excess
of—
(i) the amount of the covered entity’s fee under
this section for the calendar year the Secretary determines
should have been paid in the absence of any
such understatement, over
(ii) the amount of such fee the Secretary determined
based on such understatement.
(B) UNDERSTATEMENT.—For purposes of this paragraph,
an understatement of a covered entity’s net premiums
written with respect to health insurance for any
United States health risk for any calendar year is the difference
between the amount of such net premiums written
as reported on the return filed by the covered entity under
paragraph (1) and the amount of such net premiums written
that should have been reported on such return.
(C) TREATMENT OF PENALTY.—The penalty imposed
under subparagraph (A) shall be subject to the provisions
of subtitle F of the Internal Revenue Code of 1986 that
apply to assessable penalties imposed under chapter 68 of
such Code.
(4) TREATMENT OF INFORMATION.—As added by section
1406(a)(5) of HCERA Section 6103 of the Internal Revenue
Code of 1986 shall not apply to any information reported under
this subsection.
(h) ADDITIONAL DEFINITIONS.—For purposes of this section—
(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of the Treasury or the Secretary’s delegate.
(2) UNITED STATES.—The term ‘‘United States’’ means the
several States, the District of Columbia, the Commonwealth of
Puerto Rico, and the possessions of the United States.
(3) HEALTH INSURANCE.—øReplaced by section 10905(d)¿
The term ‘‘health insurance’’ shall not include—
(A) any insurance coverage described in paragraph
(1)(A) or (3) of section 9832(c) of the Internal Revenue
Code of 1986,
(B) any insurance for long-term care, or
(C) any medicare supplemental health insurance (as
defined in section 1882(g)(1) of the Social Security Act).
(i) GUIDANCE.—The Secretary shall publish guidance necessary
to carry out the purposes of this section and shall prescribe such
regulations as are necessary or appropriate to prevent avoidance of
the purposes of this section, including inappropriate actions taken
to qualify as an exempt entity under subsection (c)(2). As revised
by section 10905(e)
(j) EFFECTIVE DATE.—Replaced by section 1406(a)(6) of
HCERA; previous amendment by section 19095(f)(5)(A) was
unexecutable This section shall apply to calendar years beginning
after December 31, 2013.