On Feb. 22, the IRS issued final rules to define which entities are required to pay the health insurance providers fee under the Affordable Care Act (ACA), also known as the health insurance tax (HIT). The ACA imposed an annual fee on certain health insurance providers beginning in 2014. Congress temporarily suspended the HIT until 2020.
The final regulations (T.D. 9830) adopt the proposed version without any changes. The IRS initially published temporary and proposed regulations in Feb. 2015. The rules will continue to allow certain entities, such as nonprofits or employers with self-insured plans, to be exempt from the tax.
Critics of the HIT continue to advocate for its permanent repeal, noting that it increases premiums for consumers. Given that the tax faces bipartisan opposition, it may be a prime candidate for further postponement or repeal.