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Notice 2019-50: Annual fee imposed on health insurance providers for 2020

Annual fee imposed on health insurance providers

The IRS today released an advance version of Notice 2019-50 setting forth the “applicable amount” of an annual fee imposed by a provision of the Affordable Care Act on covered entities that provide health insurance for U.S. health risks.

1000

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The annual fee (which is treated as a non-deductible excise tax) is imposed on “covered entities” engaged in the business of providing health insurance for U.S. health risks, and is often referred to as the fee imposed by section 9010 of the Patient Protection and Affordable Care Act. The fee is a fixed amount that is allocated among all covered entities in proportion to their relative market share (determined by each entity’s net premiums written for the “data year,” which is the year immediately preceding the year in which the fee is paid).

The annual fee for 2019 was suspended by legislation enacted in January 2018. 

As pointed out by the IRS in today’s notice, “Absent legislative action, the fee will resume in 2020.”

Notice 2019-50 [PDF 12 KB] provides that the applicable amount of the fee for 2020 is $15,522,820,037.

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