The IRS recently published Notice 2014-47, which provided guidance on health insurance provider fees and the definition of a covered entity under the Affordable Care Act (ACA). Information contained in the notice applies to the 2014 fee year.
“Specifically, this notice resolves confusion as to the scope of the exclusions in section 9010(c)(2) from the general definition of the term covered entity,” the notice read.
Under section 9010(c)(1) of the Internal Revenue Code (IRC), covered entities are defined as any entity that provides health insurance for any U.S. health risk during the fee year. Per section 9010(c)(2), exclusions from this definition include self-insured employers, certain nonprofit organizations, government entities and non-employer established Section 501(c)(9) entities. Excluded entities should not report their net premiums written for the 2013 data year.
The notice also provided clarifications for controlled groups, which are defined as a group of two or more persons, one of which is a covered entity. Controlled groups are treated as a single covered entity for purposes of the health insurance providers fee.
“In addition, for the 2014 fee year, a controlled group must report net premiums written only for those persons who are controlled group members at the end of the day on Dec. 31 of the 2013 data year and who would qualify as a covered entity in the fee year if it were a single-person covered entity,” the IRS said.
The IRS acknowledged entities will not know if they qualify for an exclusion under the entire 2014 fee year until the end of 2014. Third-party tax information reporting services can help organizations keep up with regulatory clarifications, additions and changes to ensure they are accurately reporting.
Check out our education section for more about ACA reporting requirements for self-insured employers.
