Health Insurance Provider Fee Delayed

 December 22 2015     Shelly Hodges-Konys and David Anthony

Last Friday, President Obama signed the new tax and spending bill that not only delayed the Cadillac tax, but also delayed the annual health insurance provider fee for one year starting in 2017.

The annual health insurance provider fee is a provision within the Affordable Care Act (ACA) that requires health insurance carriers to pay an annual fee in proportion to the amount of net premiums they have written. This non-deductible fee started for insurance carriers in 2014 and has collected an estimated $19 billion over the past two years. Even though this fee does not directly affect employers, insurance companies have passed on the cost of the fee to employers sponsoring their insurance plans, which has resulted in a two to three percent increase in employers annual premiums. The end result is estimated that premiums for employees on an employer plan have seen prices increased by $170 per individual and $530 per family.

Since health insurers will not be charged the fee in the 2017, there has been much speculation on whether employers will see premiums reduced or if insurance carriers will continue with business as usual with an eye toward the fee resuming in 2018. HORAN will keep you updated on any legislative changes or on any further guidance regarding this topic.

The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation and their impact on you and your organization.