By Sara Hansard
Health insurers and the U.S. Chamber of Commerce have asked the Internal Revenue Service and the Treasury Department to take steps to reduce the tax burden of the nondeductible health insurance fee that begins in 2014.
America's Health Insurance Plans (AHIP), the trade association that represents most health insurers in the United States, noted that it “strongly supports a repeal of the health insurer fee” in its June 3 comment letter on the Health Insurance Providers Fee proposed rule. AHIP recommended that IRS adopt an interpretation of the fee in the final rule “that eliminates or ameliorates the negative impact of the non-deductibility of the fee.”
The proposed IRS rule implementing the health insurance fee (HIF) under Section 9010 of the Affordable Care Act (REG-118315-12) was released March 1 (42 DTR G-2, 3/4/13). Comments on the rule were due June 3.
“Health insurers not only will need to increase health insurance premiums to cover the fee, they also will need to increase premiums to cover their increased tax burden arising from recovery of the fee,” AHIP said in its letter, signed by Daniel Durham, executive vice president, policy and regulatory affairs; and Thomas Wilder, senior counsel. “This is because any premium increase necessary to recover the fee will increase taxable income (at least this appears to be the government's initial view as expressed in the preamble of the Proposed rules), while the fee itself will not reduce taxable income,” it said.
AHIP suggested that IRS and Treasury reconsider comments to ameliorate the problem, including an analysis submitted to Treasury official Mark Iwry in 2012 by David Schneider of law firm Skadden Arps on behalf of insurers. The proposals call for excluding from gross income premium increases resulting from the fee, AHIP said. “We believe the Treasury Department has authority to treat a health insurer's payment of additional income taxes arising due to the recovery of the fee as amounts that count towards satisfaction of that insurer's fee obligation,” it said.
Texts of comment letters from AHIP, Jost, BCBSA, Aetna, and the U.S. Chamber of Commerce are in TaxCore.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)