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13093: ACA - Health Insurance Providers Fee and Form 8963

Fed Returns Generally

What is the Health Insurance Providers Fee of the Affordable Care Act (ACA) and what is Form 8963, Report of Health Insurance Provider Information?

The Further Consolidated Appropriations Act, 2020, Division N, Subtitle E § 502, signed into law on December 20, 2019, repealed the annual fee on health insurance providers for calendar years beginning after December 31, 2020 (fee years after the 2020 fee year). As a result of the repeal, 2020 was the last fee year.

The Health Insurance Providers Fee applies to health insurance issuers and does not affect self-funded coverage. Taxpayers may see this fee as part of the premium for their health plan spread out over the months the plan is in force.

Beginning in 2014, health insurance issuers pay an annual fee based on net written premiums that the IRS calculates from issuer's Form 8963 filings. The fee is permanent and is used to fund premium tax subsidies for low-income taxpayers purchasing insurance through exchanges such as the HealthCare Marketplace (note the IRS has announced a moratorium on 2017 fees).

 Generally, these entities are not covered:

  • A self-insured employer
  • A governmental entity
  • Certain nonprofit corporations
  • Certain voluntary employees’ beneficiary associations (VEBAs)

For more information, see the IRS.Gov website ACA - Health Insurance Providers Fee.

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