n-13-76.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Part III – Administrative, Procedural, and Miscellaneous

Health Insurance Providers Fee; Procedural and Administrative Guidance

Notice 2013-76

Purpose

This notice provides guidance on the health insurance providers fee related to (1)
the time and manner for submitting Form 8963, “Report of Health Insurance Provider
Information,” (2) the time and manner for notifying covered entities of their preliminary
fee calculation, (3) the time and manner for submitting a corrected Form 8963 for the
error correction process, and (4) the time for notifying covered entities of their final fee
calculation.
Background

Section 9010 of the Patient Protection and Affordable Care Act (PPACA), Public
Law 111-148 (124 Stat. 119 (2010)), as amended by section 10905 of PPACA, and as
further amended by section 1406 of the Health Care and Education Reconciliation Act
of 2010, Public Law 111-152 (124 Stat. 1029 (2010)) (collectively, the Affordable Care

2
Act or ACA), imposes an annual fee on covered entities engaged in the business of
providing health insurance for United States health risks.
The Health Insurance Providers Fee Regulations in 26 CFR Part 57, issued on
November 29, 2013, provide the method by which each covered entity’s annual fee is
calculated. Those regulations provide that the Internal Revenue Service (IRS) will issue
additional guidance in the Internal Revenue Bulletin relating to the reporting and fee
determination processes. This notice provides that guidance.
Section 57.3(a)(1) provides that each covered entity, including each controlled
group that is treated as a single covered entity, must report its net premiums written for
health insurance of United States health risks during the data year to the IRS by April
15
th
of the fee year on Form 8963 in accordance with the instructions for the form.
Section 57.2(g) defines fee year
as the calendar year in which the fee must be paid to
the government, and § 57.2(d) defines data year as the calendar year immediately
before the fee year.
Section 57.3(a)(2) authorizes the IRS to provide rules in guidance published in
the Internal Revenue Bulletin for the manner of reporting by a covered entity under this
section, including rules for reporting by a designated entity on behalf of a controlled
group that is treated as a single covered entity. Section 57.2(c)(1) defines controlled
group as a group of two or more persons, including at least one person that is a covered
entity, that is treated as a single employer under § 52(a), 52(b), 414(m), or 414(o).
Section 57.2(c)(2) provides that a controlled group is treated as a single covered entity
for purposes of the fee. Section 57.2(e)(1) defines a designated entity as the person

3
within the controlled group that is designated to act on behalf of the controlled group
regarding the fee with respect to filing Form 8963, receiving IRS communications about
the fee for the group, filing a corrected Form 8963 for the group, if applicable, and
paying the fee for the group to the government.
Section 57.3(a)(3) provides that, pursuant to section 9010(g)(4), the information
reported on each Form 8963 will be open for public inspection or available upon
request.
Section 57.5 provides that, for each fee year, the IRS will make a preliminary fee
calculation for each covered entity and will notify each covered entity of this calculation
by the date prescribed in guidance published in the Internal Revenue Bulletin. Section
57.5(a) provides that the notification will include (1) the covered entity’s allocated fee;
(2) the covered entity’s net premiums written for health insurance of United States
health risks; (3) the covered entity’s net premiums written for health insurance of United
States health risks taken into account after application of § 57.4(a)(4); (4) the aggregate
net premiums written for health insurance of United States health risks taken into
account for all covered entities; and (5) instructions for how to submit a corrected Form
8963 to correct any errors through the error correction process. Section 57.6(a)
requires each covered entity to review the preliminary fee calculation and submit a
corrected Form 8963 if there are any errors. Section 57.6(b) provides that the IRS will
specify in other guidance published in the Internal Revenue Bulletin the time and
manner by which a covered entity must submit a corrected Form 8963.

4
Section 57.7(b) requires the IRS to send each covered entity its final fee
calculation no later than August 31
st
of each fee year. Section 57.7(d) requires each
covered entity to pay its fee by September 30
th
of each fee year.
Time and manner for submitting Form 8963

In accordance with § 57.3(a)(1), each covered entity (or, in the case of a
controlled group, each designated entity) must file its Form 8963 by April 15
th
of each
fee year. The Form 8963 must be filed in accordance with the instructions to the form.
The form and the instructions will be electronically available at www.irs.gov
.
Time and manner for notifying covered entities of their preliminary fee calculation
The IRS will mail each covered entity (or, in the case of a controlled group, each
designated entity) a notice of its preliminary fee calculation by June 15
th
of each fee
year. The notice of preliminary fee calculation will include all of the information required
by § 57.5(a).
Time and manner for submitting an error correction report

If the covered entity believes that the notice of preliminary fee calculation
contains one or more errors in the mathematical calculation of the fee, the net premiums
written data, the net premiums written after taking into account the application of
§ 57.4(a)(4), or any other error, the covered entity (or, in the case of a controlled group,
the designated entity) must provide a corrected report to the IRS by July 15
th
of each
fee year. The covered entity will make an error correction report by completing in full a
new Form 8963 and checking the "Corrected Report" box on the form. The corrected
Form 8963 will replace the original Form 8963. Therefore, the corrected report must

5
contain all of the information required by the form’s instructions. In the case of a
controlled group, if the notice of preliminary fee calculation contains one or more errors,
the corrected Form 8963 must include all of the information required by the form’s
instructions for the entire controlled group, including members that do not have
corrections. Additionally, a covered entity may include attachments with the corrected
Form 8963 if any corrected item requires further explanation.
The IRS will validate the data submitted on the corrected Form 8963 to ensure
accuracy and completeness. Section 9010(b)(3) authorizes the IRS to use any other
source of information to determine each covered entity’s net premiums written for health
insurance of United States health risks in addition to the information reported by each
covered entity. Section 57.4(b)(1) provides that other sources of information that the
IRS may use to determine net premiums written include the Supplemental Health Care
Exhibit, which supplements the annual statement filed with the National Association of
Insurance Commissioners (NAIC) pursuant to State law, the annual statement itself or
the Accident and Health Policy Experience filed with the NAIC, the Medical Loss Ratio
Annual Reporting Form filed with the Center for Medicare & Medicaid Services’ Center
for Consumer Information and Insurance Oversight of the U.S. Department of Health
and Human Services, or any similar statements filed with the NAIC, with any State
government, or with the Federal government pursuant to applicable State or Federal
requirements. To the extent any covered entity's preliminary fee calculation changes as
a result of the error correction process, the final fee calculation for one or more covered
entities may differ from the preliminary fee calculations that those entities previously

6
received. Any such changes will be reflected in each covered entity's final fee
calculation.
Notification and Payment of Final Fee Calculation

In accordance with § 57.7(b), the IRS will notify each covered entity (or each
designated entity of a controlled group that is treated as a single covered entity) of its
final fee calculation on or before August 31
st
of each fee year. In accordance with
§ 57.7(d), each covered entity (or designated entity, if applicable) must pay this fee by
September 30
th
of each fee year.
Disclosure
The information submitted on both original and corrected Forms 8963 is not
confidential. Although, generally, tax returns and return information are confidential, as
required by § 6103, in accordance with § 57.3(a)(3), the information on Form 8963 is
not subject to § 6103. All information on Form 8963 will be open for public inspection or
available upon request. Do not include personal information other than that requested
on Form 8963.
Drafting Information

The principal author of this notice is Charles J. Langley, Jr. of the Office of
Associate Chief Counsel (Passthroughs & Special Industries). For further information
regarding this notice, please contact Mr. Langley at (202) 317-6855 (not a toll-free call).