Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Fees on Health Insurance Policies And Self-Insured Plans for the Patient-Centered Outcomes Research TrustFund

Fees on Health Insurance Policies And Self-Insured Plans for the Patient-Centered Outcomes Research TrustFund

Ratings: (0)|Views: 60 |Likes:
Published by Peggy Satterfield
This document contains final
regulations that implement and provide
guidance on the fees imposed by the
Patient Protection and Affordable Care
Act on issuers of certain health
insurance policies and plan sponsors of
certain self-insured health plans to fund
the Patient-Centered Outcomes Research
Trust Fund. These final regulations
affect the issuers and plan sponsors that
are directed to pay those fees.
This document contains final
regulations that implement and provide
guidance on the fees imposed by the
Patient Protection and Affordable Care
Act on issuers of certain health
insurance policies and plan sponsors of
certain self-insured health plans to fund
the Patient-Centered Outcomes Research
Trust Fund. These final regulations
affect the issuers and plan sponsors that
are directed to pay those fees.

More info:

Categories:Topics, Art & Design
Published by: Peggy Satterfield on Mar 11, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

03/28/2014

pdf

text

original

 
72721
Federal Register
/Vol. 77, No. 235/Thursday, December 6, 2012/Rules and Regulations
and adding the word, ‘‘customs’’ beforethe word, ‘‘station’’;
d. Paragraph (b)(1) is amended by:
i. Removing the word ‘‘Customs’’ eachplace that it appears and adding in itsplace the term ‘‘CBP’’;
ii. Removing the word ‘‘shall’’ eachplace that it appears and adding in itsplace the word ‘‘will’’;
iii. Removing the sum ‘‘$2,000’’ andadding in its place the sum ‘‘$2,500’’;and
iv. Removing the word ‘‘shall’’ andadding in its place the word ‘‘will’’;
e. Paragraph (b)(2) is amended byremoving the word ‘‘shall’’ and addingin its place the word ‘‘will’’, and byremoving the word ‘‘Customs’’ andadding in its place the term ‘‘CBP’’;
f. Paragraph (c) is amended by:
i. Removing, in its heading and in itstext, the sum ‘‘$2,000’’ and adding in itsplace the sum $2,500’’;
ii. Removing the word ‘‘Customs’’each place that it appears in the firstsentence and adding in its place theterm ‘‘CBP’’;
iii. Removing the words ‘‘Customstreatment’’ in the third sentence andadding in its place the words ‘‘customstreatment’’;
iv. Removing the words ‘‘Customsoffice’’ and adding in its place thewords ‘‘CBP office’’; and
v. Removing the word ‘‘shall’’ eachplace that it appears and adding in itsplace the term ‘‘will’’;
g. Paragraph (e)(1) is amended byremoving the word ‘‘Customs’’ in eachplace that it appears and adding in itsplace the term ‘‘CBP’’, and by removingthe word ‘‘shall’’ and adding in its placethe word ‘‘will’’; and
h. Paragraph (e)(2) is amended by:
i. Removing the words ‘‘CustomsForm’’ each place that it appears, in itsheading and its text, and adding in itsplace the words ‘‘CBP Form’’;
ii. Removing the words ‘‘Customsofficer’’ and adding in its place thewords ‘‘CBP officer’’;
iii. Removing the words ‘‘Customspurposes’’ and adding in its place thewords ‘‘customs purposes’’;
iv. Removing the word ‘‘shall’’ in thefirst sentence and adding in its place theword ‘‘must’’; and
v. Removing the word ‘‘shall’’ in thesecond sentence and adding in its placethe word ‘‘will’’.
§145.31[Amended]
22. Section 145.31 is amended byremoving the word ‘‘shall’’ and addingin its place the word ‘‘will’’.
§145.35[Amended]
23. Section 145.35 is amended byremoving the sum ‘‘$2,000’’ and addingin its place the sum ‘‘$2,500’’.
§145.41[Amended]
24. Section 145.41 is amended byremoving the sum ‘‘$2,000’’ and addingin its place the sum ‘‘$2,500’’.
PART 148—PERSONALDECLARATIONS AND EXEMPTIONS
25. The general authority citation forpart 148 is revised and the specificauthority citations for §148.51 and148.64 continue to read as follows:
Authority:
19 U.S.C. 66, 1496, 1498, 1624.The provisions of this part, except for subpartC, are also issued under 19 U.S.C. 1202(General Note 3(i), Harmonized Tariff Schedule of the United States).
* * * * *
Sections 148.43, 148.51, 148.63, 148.64,148.74 also issued under 19 U.S.C. 1321;
* * * * *
§148.23[Amended]
26. In §148.23:
a. Paragraph (c)(1) is amended byremoving, in its heading and in its text,the sum ‘‘$2,000’’ and adding in itsplace the sum ‘‘$2,500’’;
 b. Paragraph (c)(1) is further amended by removing, in the text, the words‘‘Sections VII, VIII, XI, and XII; Chapter94; and’’;
c. Paragraph (c)(2) is amended byremoving, in its heading and in its text,the sum ‘‘$2,000’’ and adding in itsplace the sum ‘‘$2,500’’; and
d. Paragraph (c)(2) is further amended by removing the words ‘‘Sections VII,VIII, XI, and XII; Chapter 94; and’’.
§148.54[Amended]
27. In §148.54
a. Paragraph (b) is amended byremoving the word ‘‘shall’’ and addingin its place the word ‘‘must’’, and byremoving the sum ‘‘$250’’ and adding inits place the sum‘‘$2,500’’; and
 b. Paragraph (c) is amended byremoving the word ‘‘shall’’ each placethat it appears and adding in its placethe word ‘‘will’’.
David V. Aguilar,
Deputy Commissioner, U.S. Customs and Border Protection.
Approved: November 28, 2012.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2012–29193 Filed 12–5–12; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF THE TREASURYInternal Revenue Service26 CFR Parts 40, 46, and 602
[TD 9602]RIN 1545–BK59
Fees on Health Insurance Policies andSelf-Insured Plans for the Patient-Centered Outcomes Research TrustFund
AGENCY
:
Internal Revenue Service (IRS),Treasury.
ACTION
:
Final regulations.
SUMMARY
:
This document contains finalregulations that implement and provideguidance on the fees imposed by thePatient Protection and Affordable CareAct on issuers of certain healthinsurance policies and plan sponsors of certain self-insured health plans to fundthe Patient-Centered Outcomes ResearchTrust Fund. These final regulationsaffect the issuers and plan sponsors thatare directed to pay those fees.
DATES
:
Effective Date: 
These regulationsare effective December 6, 2012.
Applicability Dates: 
These regulationsapply to policy and plan years endingon or after October 1, 2012, and beforeOctober 1, 2019.
FOR FURTHER INFORMATION CONTACT
:
R.Lisa Mojiri-Azad at (202) 622–6080(regarding self-insured healtharrangements) or Rebecca L. Baxter at(202) 622–3970 (regarding healthinsurance policies).
SUPPLEMENTARY INFORMATION
:
Paperwork Reduction Act
The collection of informationcontained in these final regulations has been reviewed and approved by theOffice of Management and Budget inaccordance with the PaperworkReduction Act of 1995 (44 U.S.C.3507(d)) under control number 1545–2238. The collections of information inthese final regulations are in §46.4375–1(c)(2)(iv) (use of the snapshot methodto calculate the fee under section 4375);§46.4375–1(c)(2)(v) (use of the NationalAssociation of Insurance Commissioners(NAIC) Supplemental Health CareExhibit to calculate the fee undersection 4375); §46.4375–1(c)(2)(vi) (useof certain state forms to calculate the feeunder section 4375); §46.4376–1(b)(2)(G) (identification or designationof a plan sponsor under the governingplan document for certain applicableself-insured health plans); §46.4376–1(c)(2)(iv) (use of snapshot method tocalculate the fee under section 4376);and §46.4376–1(c)(2)(v) (use of the
VerDate Mar<15>2010 14:03 Dec 05, 2012Jkt 229001PO 00000Frm 00041Fmt 4700Sfmt 4700E:\FR\FM\06DER1.SGM06DER1
  m  s   t  o  c   k  s   t   i   l   l  o  n   D   S   K   4   V   P   T   V   N   1   P   R   O   D  w   i   t   h
 
72722
Federal Register
/Vol. 77, No. 235/Thursday, December 6, 2012/Rules and Regulations
1
The Department of Labor has advised that, because the fee is imposed on the plan sponsorunder section 4376 (instead of the plan), paying thePCORI fee generally does not constitute apermissible expense of the plan for purposes of Title I of the Employee Retirement Income SecurityAct (ERISA), although special circumstances mayexist in limited situations. The Department of Laborwill provide guidance in the near future on PCORIfee payments under Title I of ERISA on its Web site,
. 
Form 5500, ‘‘Annual Return/Report of Employee Benefit Plan,’’ or Form 5500–SF, ‘‘Short Form Annual Return/Reportof Employee Benefit Plan’’ to calculatethe fee under section 4376).An agency may not conduct orsponsor, and a person is not required torespond to, a collection of informationunless it displays a valid controlnumber assigned by the Office of Management and Budget.Books or records relating to acollection of information must beretained as long as their contents may become material in the administrationof any internal revenue law. Generally,tax returns and tax return informationare confidential, as required by 26U.S.C. 6103.
Background
This document contains finalamendments to 26 CFR part 40 (ExciseTax Procedural Regulations) and 26 CFRpart 46 (relating to excise taxes imposedon policies issued by foreign insurersand obligations not in registered form)to implement the requirements undersections 4375 through 4377 of theInternal Revenue Code (Code). TheTreasury Department and the IRS issuedproposed regulations under sections4375 through 4377 on April 17, 2012 (77FR 22,691). Sections 4375 and 4376 of the Code impose fees on issuers of specified health insurance policies andplan sponsors of applicable self-insuredhealth plans, and section 4377 containsspecial rules that apply to these issuersand plan sponsors with respect to thesefees. Sections 4375, 4376, and 4377were added to the Code by section 6301of the Patient Protection and AffordableCare Act (Affordable Care Act), PublicLaw 111–148 (124 Stat. 119 (2010)).The Affordable Care Act provides forthe establishment of the private,nonprofit corporation, the Patient-Centered Outcomes Research Institute(the ‘‘Institute’’). Through research, theInstitute will assist patients, clinicians,purchasers, and policy-makers inmaking informed health decisions byadvancing the quality and relevance of evidence-based medicine through thesynthesis and dissemination of comparative clinical effectivenessresearch findings. The statutespecifically prohibits the Secretary of Health and Human Services (HHS) fromusing the evidence or findings of theresearch conducted in determiningcoverage, reimbursement, or incentiveprograms unless it is through aniterative and transparent process whichincludes public comment and considersthe effect on subpopulations. Nothingunder this provision allows theSecretary of HHS to deny coverage of items or services solely on the basis of comparative clinical effectivenessresearch. The statute provides that theInstitute will not develop a dollars-per-quality-life-year estimate as a thresholdto establish effective or recommendedcare.Section 6301 of the Affordable CareAct amended the Code by adding newsection 9511 to establish the Patient-Centered Outcomes Research TrustFund (the ‘‘Trust Fund’’), which is thefunding source for the Institute. Section6301 of the Affordable Care Act alsoadded new Code sections 4375, 4376,and 4377 to provide a funding sourcefor the Trust Fund that is to be financed,in part, by fees to be paid by issuers of specified health insurance policies andsponsors of applicable self-insuredhealth plans.
Statutory Provisions
Section 4375 imposes a fee on anissuer of a specified health insurancepolicy for each policy year ending on orafter October 1, 2012, and beforeOctober 1, 2019. Under section 4375(a),the fee is two dollars (one dollar in thecase of policy years ending beforeOctober 1, 2013) multiplied by theaverage number of lives covered underthe policy. Under section 4375(d), forpolicy years ending on or after October1, 2014, the fee is increased based onincreases in the projected per capitaamount of National HealthExpenditures. Section 4375(b) providesthat the fee imposed by section 4375(a)shall be paid by the issuer of the policy.Section 4375(c) defines a
specified health insurance policy 
as any accidentor health insurance policy (including apolicy under a group health plan) issuedwith respect to individuals residing inthe United States. Section 4375(c)(2)excludes from a specified healthinsurance policy any insurance if substantially all of its coverage is of excepted benefits described in section9832(c). Section 4375(c)(3) provides thata specified health insurance policyincludes any prepaid health coveragearrangement described in section4375(c)(3)(B). An arrangement isdescribed in section 4375(c)(3)(B) if,under the arrangement, fixed paymentsor premiums are received asconsideration for a person’s agreementto provide or arrange for the provisionof accident or health coverage toresidents of the United States, regardlessof how the coverage is provided orarranged to be provided.Section 4376 imposes a fee on a plansponsor of an applicable self-insuredhealth plan for each plan year ending onor after October 1, 2012, and beforeOctober 1, 2019.
1
Under section 4376(a),the fee is two dollars (one dollar forplan years ending before October 1,2013) multiplied by the average numberof lives covered under the plan. Undersection 4376(d), for plan years endingon or after October 1, 2014, the fee isincreased based on increases in theprojected per capita amount of NationalHealth Expenditures. Section 4376(b)(1)provides that the fee imposed by section4376(a) shall be paid by the plansponsor.Section 4376(b)(2) defines a
 plansponsor 
as the employer in the case of a plan established or maintained by asingle employer, or the employeeorganization in the case of a planestablished or maintained by anemployee organization. Section4376(b)(2) also provides that, in the caseof (1) a plan established or maintained by two or more employers or jointly byone or more employers and one or moreemployee organizations, (2) a multipleemployer welfare arrangement, or (3) avoluntary employees’ beneficiaryassociation described in section501(c)(9), the plan sponsor is theassociation, committee, joint board of trustees, or other similar group of representatives of the parties whoestablish or maintain the plan. Section4376(b)(2) further provides that in thecase of a plan established or maintained by a rural electric cooperative (asdefined in section 3(40)(B)(iv) of theEmployee Retirement Income SecurityAct of 1974 (ERISA)) or rural telephonecooperative association (as defined insection 3(40)(B)(v) of ERISA), the plansponsor is the cooperative or associationthat established or maintained the plan.Section 4376(c) defines an
applicableself-insured health plan
as any plan forproviding accident or health coverage if any portion of the coverage is providedother than through an insurance policy,and the plan is established ormaintained (1) By one or moreemployers for the benefit of theiremployees or former employees, (2) byone or more employee organizations forthe benefit of their members or formermembers, (3) jointly by one or moreemployers and one or more employeeorganizations for the benefit of employees or former employees, (4) bya voluntary employees’ beneficiary
VerDate Mar<15>2010 14:03 Dec 05, 2012Jkt 229001PO 00000Frm 00042Fmt 4700Sfmt 4700E:\FR\FM\06DER1.SGM06DER1
  m  s   t  o  c   k  s   t   i   l   l  o  n   D   S   K   4   V   P   T   V   N   1   P   R   O   D  w   i   t   h
 
72723
Federal Register
/Vol. 77, No. 235/Thursday, December 6, 2012/Rules and Regulations
association described in section501(c)(9), (5) by any organizationdescribed in section 501(c)(6), or (6) if not previously described, by a multipleemployer welfare arrangement (asdefined in section 3(40) of ERISA), arural electric cooperative (as defined insection 3(40)(B)(iv) of ERISA), or a ruraltelephone cooperative association (asdefined in section 3(40)(B)(v) of ERISA).Section 4377 includes definitions andspecial rules that apply for purposes of sections 4375 and 4376. Section4377(a)(1) defines
accident and healthcoverage
as any coverage that, if provided by an insurance policy, wouldcause the policy to be a specified healthinsurance policy (as defined in section4375(c)).Section 4377(b)(1)(B) provides that‘‘[n]otwithstanding any other law or ruleof law, governmental entities shall not be exempt from’’ the fees imposed bysections 4375 and 4376 unless thepolicy or plan is an exemptgovernmental program. Section4377(b)(3) defines an
exempt governmental program
as (1) anyinsurance program established undertitle XVIII of the Social Security Act (42U.S.C. 1395
et. seq.
) (Medicare), (2) themedical assistance program established by title XIX (42 U.S.C. 1396
et. seq.
)(Medicaid) or title XXI of the SocialSecurity Act (42 U.S.C. 1397aa
et. seq.
)(Children’s Health Insurance Program),(3) any program established by Federallaw for providing medical care (otherthan through insurance policies) toindividuals (or the spouses anddependents thereof) by reason of suchindividuals being members of theArmed Forces of the United States orveterans, and (4) any programestablished by Federal law for providingmedical care (other than throughinsurance policies) to members of Indian tribes (as defined in section 4(d)of the Indian Health Care ImprovementAct, 25 U.S.C. 1603). Under thesespecial rules, a governmental entity(including a federally recognized Indiantribal government) that is the plansponsor of an applicable self-insuredhealth plan that does not meet thedefinition of an exempt governmentalprogram must pay the fee imposed bysection 4376.Section 4377(c) provides that the feesimposed by sections 4375 and 4376 aretreated as taxes for purposes of subtitleF of the Code (sections 6001 through7874 that set forth the rules of federaltax procedure and administration).
Notice 2011–35 and Proposed Regulations
On June 8, 2011, the IRS releasedNotice 2011–35 (2011–25 IRB 879),which requested comments on how thefees imposed under sections 4375 and4376 (referred to collectively as thePCORI fee) should be calculated andpaid, including possible rules and safeharbors. The Treasury Department andthe IRS received numerous comments inresponse to Notice 2011–35 andconsidered all comments in issuingproposed regulations under sections4375, 4376, and 4377 (77 FR 22,691).The Treasury Department and the IRSreceived 26 written comments on theproposed regulations. Afterconsideration of the comments, thesefinal regulations adopt the provisions of the proposed regulations with certainmodifications, the most significant of which are highlighted in the Summaryof Comments and Explanation of Revisions. See §601.601(d)(2).
Summary of Comments andExplanation of Revisions
I. Health Insurance Policies Subject tothe PCORI Fee
Section 4375(a) imposes a fee on anissuer of a specified health insurancepolicy for each policy year ending on orafter October 1, 2012, and beforeOctober 1, 2019. Section 46.4375–1(b)(1)of these regulations defines a
specified health insurance policy 
as any accidentand health insurance policy (includinga policy under a group health plan)issued with respect to individualsresiding in the United States. Section46.4375–1(b)(1)(ii) provides exceptionsto the term
specified health insurance policy.
Section 4375(c)(2) and§46.4375–1(b)(1)(ii)(A) provide anexclusion for any insurance if substantially all of its coverage is of excepted benefits described in section9832(c). While §46.4376–1(b)(ii)(B)excludes from the definition of applicable self-insured health plan anemployee assistance program (EAP),disease management program, orwellness program, if the program doesnot provide significant benefits in thenature of medical care or treatment, nosimilar exclusion was included in theproposed regulations for a specifiedhealth insurance policy.One commentator explained thatCalifornia and Nevada regulate EAPsthat provide for four or morecounseling, treatment, or therapy visitsas insurance thereby requiring theissuance of an insurance policy. Thecommentator argued that in any otherstate, identical EAPs would be excludedfrom the definition of applicable self-insured plan and not subject to thePCORI fee. In recognition of the uniqueCalifornia and Nevada requirements thatcertain employee assistance plans betreated as insurance, the commentatorasked that an exception be added to thedefinition of specified health insurancepolicy to exclude those EAPs. Inresponse to this comment, these finalregulations provide that the definitionof a
specified health insurance policy 
does not include any insurance policyto the extent that the policy provides foran EAP, disease management program,or wellness program, if the programdoes not provide significant benefits inthe nature of medical care or treatment.No inference is intended whether thespecific health benefits cited by thecommentator constitute insignificant benefits.
II. Retiree Coverage and Retiree-Only Plans
As noted in the preamble to theproposed regulations, sections 4375 and4376 may apply to a retiree-only plan because, although group health plansthat have fewer than two participantswho are current employees (such asretiree-only plans) are excluded fromthe requirements of chapter 100 (settingforth requirements applicable to grouphealth plans such as portability,nondiscrimination, and market reformrequirements), this exclusion does notapply to sections 4375 and 4376 becausethese sections are in chapter 34. Inaddition, section 4376(c)(2)(A) statesexplicitly that an applicable self-insuredhealth plan includes a plan establishedor maintained by one or more employersfor the benefit of their employees orformer employees. Some commentatorsrequested that the final regulationsexempt from the PCORI fee retireecoverage on public policy grounds, butgenerally agreed that a retiree-onlyinsured plan or retiree coverage underan applicable self-insured health planmay be subject to the PCORI fee.Consistent with the statutory language,the final regulations apply the PCORIfee to specified health insurancepolicies or applicable self-insuredhealth plans that provide accident andhealth coverage to retirees, includingretiree-only policies and plans.
III. COBRA Coverage
Commentators requested clarificationof whether sections 4375 and 4376apply to continuation coverage requiredunder the Consolidated OmnibusBudget Reconciliation Act of 1985(COBRA) or similar continuationcoverage under other federal law orunder state law (referred to collectivelyas ‘‘continuation coverage’’) and askedthat the final regulations explicitlyexclude continuation coverage fromapplication of those sections. If thecoverage provided under the
VerDate Mar<15>2010 14:03 Dec 05, 2012Jkt 229001PO 00000Frm 00043Fmt 4700Sfmt 4700E:\FR\FM\06DER1.SGM06DER1
  m  s   t  o  c   k  s   t   i   l   l  o  n   D   S   K   4   V   P   T   V   N   1   P   R   O   D  w   i   t   h

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->