San Francisco Tax Preparation / CPA: Adjusted Applicable Dollar Amount for Fee Imposed on Health Insurance Plans Announced

Filed in CCH NEWS FEED by on January 8, 2021

The IRS has announced that the applicable dollar amount used to calculate the fees imposed by Code Secs. 4375 and 4376 for policy and plan years that end on or after October 1, 2020, and before October 1, 2021, is $2.66. This figure is based on the percentage increase in the projected per capita amount of the National Health Expenditures published by the U.S. Department of Health and Human Services (HHS) on March 19, 2020.

The fees are used to fund the Patient-Centered Outcomes Research Trust Fund (PCORTF).

Calculation
The fees are generally calculated by multiplying the average number of lives covered under the health insurance policy or self-insured health plan by the adjusted applicable dollar amount. The adjusted applicable dollar amount is the sum of:

the applicable dollar amount for the policy year or plan year ending in the previous federal fiscal year; plus
the amount equal to the product of the applicable dollar amount for the policy year or plan year ending in the previous federal fiscal year; and the percentage increase in the projected per capita amount of the National Health Expenditures most recently released by HHS before the beginning of the federal fiscal year (see Reg. §46.4375-1(c)(4) and Reg. §46.4376-1(c)(3)).
The applicable dollar amount for the previous year was $2.54.

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