Instructions for Form 8963

Instructions for Form 8963

Department of the Treasury

Internal Revenue Service

(Rev. January 2020)

Report of Health Insurance Provider Information

Section references are to the Internal Revenue

Code unless otherwise noted.

Future Developments

For the latest information about

developments related to Form 8963 and

its instructions, such as legislation

enacted after they were published, go to

IRS.gov/Form8963.

Note. See IRS.gov/ACA9010 for

additional guidance.

What’s New

Forms 8963 reporting more than $25

million in net premiums written must be

filed electronically. See 26 C.F.R. section

57.3(a)(2)(ii), as amended by T.D. 9881,

for further details. For more information on

electronic filing, see How To File below.

General Instructions

Purpose of Form

File Form 8963 during each fee year (year

the annual health insurance provider fee is

due) to report net premiums written for

U.S. health risks during the data year

(calendar year immediately preceding the

fee year). The IRS will use that information

when figuring the annual fee imposed by

Affordable Care Act (ACA) section 9010.

(Public Law (P.L.) 111-148, section 9010;

P.L. 111-148, section 10905; P.L.

111-152, section 1406; and P.L. 113-235,

division M.)

Who Must File

Generally, a covered entity that provides

health insurance for any U.S. health risk

during the 2020 fee year (the calendar

year in which the fee must be paid) must

file Form 8963.

When To File

You must file Form 8963 by April 15, 2020.

Note. If filing electronically, upload the

completed fillable version of the form. Do

not print and scan the form.

If you’re not required to file

electronically, you may file a paper Form

8963.

E-File: It’s Convenient, Safe,

and Secure

IRS e-file is the IRS’s electronic filing

program. For more information about IRS

e-file, go to IRS.gov/Form8963efile. By

filing electronically, you will receive an

electronic acknowledgment once you

complete the transaction. Keep it with your

records.

Where To File

If you are not required to file

electronically and prefer to file by

mail, send your paper Form 8963

to the following address.

Internal Revenue Service

1973 Rulon White Blvd.

Mail Stop 4916 IPF

Ogden, UT 84201-0051

Send the forms in a flat mailing envelope

(not folded). Do not staple, tear, or tape

any of these forms. If you are sending a

large number of forms in conveniently

sized packages, write your name on each

package and number the packages

consecutively.

U.S. postal regulations require forms

and packages to be sent by First-Class

Mail. However, you may use private

delivery services. To determine which

services you may use, go to IRS.gov/PDS.

If you mail your form, also fax it to

TIP 877-797-0235.

If you have more than $25 million in net

premiums written to report, you must file

Form 8963 (including any corrected Forms

8963) electronically. If you are required to

file electronically, your Form 8963 will not

be considered filed unless it is filed

electronically.

If you would like to request an

acknowledgment that we received your

Form 8963, please email LBI.IPF@irs.gov

with the company information and/or

tracking number and we will reply when

we receive the form. If you use an

overnight service, add the email address

LBI.IPF@irs.gov in the recipient email and

we will reply when we receive the form.

You can file Form 8963 (with Form

8453-R, Electronic Filing Declaration for

Form 8963) electronically by accessing

IRS e-file using your own computer, or, for

this year and Form 8963 only, you can fax

the Form 8963 to 877-797-0235.

The information on this form is not

confidential. Although, generally, returns

and return information are confidential, as

required by section 6103, the information

on this form is not subject to section 6103,

How To File

Jan 17, 2020

Public Disclosure

Cat. No. 60499R

pursuant to ACA section 9010, as

amended. All information on this form is

subject to public disclosure. Do not

include personal information other than

that requested by this form.

Definitions

Covered entity. Generally, covered

entity means any entity with net premiums

written for health insurance for U.S. health

risks during the fee year that is:

• A health insurance issuer within the

meaning of section 9832(b)(2);

• A health maintenance organization

within the meaning of section 9832(b)(3);

• An insurance company that is subject to

tax under subchapter L, Part I or II, or that

would be subject to tax under subchapter

L, Part I or II, but for the entity being

exempt from tax under section 501(a);

• An insurer that provides health

insurance under Medicare Advantage,

Medicare Part D, or Medicaid; or

• A non-fully insured multiple employer

welfare arrangement (MEWA).

Net premiums written. Net premiums

written means premiums written, including

reinsurance premiums written, reduced by

reinsurance ceded, and reduced by

ceding commissions and medical loss

ratio (MLR) rebates with respect to the

data year. Net premiums written includes

premiums written for assumption

reinsurance and is reduced by assumption

reinsurance premiums ceded. Net

premiums written does not include

premiums written for indemnity

reinsurance and is not reduced by

indemnity reinsurance ceded.

• Assumption reinsurance is

reinsurance for which there is a novation

and the reinsurer takes over the entire risk

of loss pursuant to a new contract.

• Indemnity reinsurance is an

agreement between one or more

reinsuring companies and a covered entity

under which (a) the reinsuring company

agrees to accept, and to indemnify the

issuing company for, all or part of the risk

of loss under policies specified in the

agreement; and (b) the covered entity

retains its liability to, and its contractual

relationship with, the individuals whose

health risks are insured under the policies

specified in the agreement.

In determining net premiums

TIP written, filers must take

assumption reinsurance into

account by including assumption

reinsurance written in direct premiums

written and deducting assumption

reinsurance ceded from direct premiums

written. However, filers may not include

indemnity reinsurance written in direct

premiums written and may not deduct

indemnity reinsurance ceded from direct

premiums written.

U.S. health risk. A U.S. health risk

means the health risk of any individual

who is:

• A U.S. citizen,

• A resident of the United States (within

the meaning of section 7701(b)(1)(A)), or

• Located in the United States, with

respect to the period that individual is so

located.

Health insurance. In general, the term

“health insurance” has the same meaning

as the term “health insurance coverage” in

section 9832(b)(1)(A), defined to mean

benefits consisting of medical care

(provided directly, through insurance or

reimbursement, or otherwise) under any

hospital or medical service policy or

certificate, hospital or medical service plan

contract, or health maintenance

organization contract offered by a covered

entity.

The term “health insurance”

TIP includes limited scope (also called

stand-alone) dental and vision

benefits under section 9832(c)(2)(A) and

retiree-only health insurance, but does not

include any other excepted benefits under

section 9832(c).

For the definitions of controlled group,

single-person covered entity, and

designated entity, see Specific

Instructions, next.

Specific Instructions

Covered entity information. A covered

entity is either a single-person covered

entity or a member of a controlled group. A

single-person covered entity is a covered

entity that is not a member of a controlled

group. Under the controlled group rule of

ACA section 9010(c)(3), all persons

treated as a single employer under

sections 52(a), 52(b), 414(m), or 414(o)

will be treated as one covered entity. In

applying the single employer rules, ACA

section 9010(c)(3)(B) provides that a

foreign entity subject to tax under section

881 is included within a controlled group

under section 52(a) or 52(b). A person is

treated as being a member of a controlled

group if it is a member of the group at the

end of the day on December 31, 2019,

and would qualify as a covered entity in

2020 if it were a single-person covered

entity.

Box 1. Single-person covered entity.

Check box 1 if you are a single-person

covered entity. You must sign Part I on

page 1 (see Part l signature instructions

below). Also complete the first line of

Schedule A.

Designated entity. Each controlled

group must have a designated entity.

If the controlled group, without regard

to foreign corporations included under

ACA section 9010(c)(3)(B), is also an

affiliated group that files a consolidated

return for federal income tax purposes, the

designated entity is the agent of the

affiliated group as identified on the tax

return filed for the data year.

If not, the controlled group must select

one of its members to be the designated

entity.

If a controlled group does not select a

designated entity, the IRS will select a

member of the controlled group as the

designated entity for the controlled group.

The designated entity is responsible for

the following for the group:

• Filing Form 8963,

• Receiving IRS communications about

the fee,

• Filing any necessary error correction

report,

• Paying the fee to the IRS,

• Obtaining consents from all controlled

group members that are required to be

listed on Schedule A of this form, and

• Providing (to the IRS upon request) the

consents obtained from controlled group

members that are required to be listed on

Schedule A of this form.

If the IRS selects the designated entity,

then all members of the controlled group

that are required to be listed on

Schedule A of this form will be deemed to

have consented to this election.

Box 2a. Agent of an affiliated group.

Check box 2a if you are the agent of an

affiliated group. You must also sign Part I

on page 1 (see Part I signature

instructions below). Also complete the first

line of Schedule A, with your National

Association of Insurance Commissioners

(NAIC) company and group code and net

premiums written, if any.

Box 2b. Other. Check box 2b if you are

the designated entity for a covered entity

that is not an affiliated group. You must

also sign Part I on page 1 (see Part I

signature instructions below). Also

complete the first line of Schedule A, with

your NAIC company and group code and

net premiums written, if any.

Corrected report. Check the box if this is

a corrected report.

Employer identification number (EIN).

Enter your EIN. If you do not have an EIN,

you must apply for one. If filing your Form

8963 electronically, enter your 9-digit EIN

without the dash. The EIN will be properly

formatted for you.

-2-

Number of controlled group members

included in Schedule A. Enter the

number of controlled group members who

are listed on Schedule A, including the

entity in box 2a or 2b. If reporting as a

single-person covered entity, enter “1” for

the number of controlled group members.

Entity name. If you checked box 1, enter

the name of the single-person covered

entity in the entity name box. If you

checked box 2a or 2b, enter the name of

the designated entity. If you have a trade

name or are doing business under a

different name, enter that name or d/b/a

name on the “Entity name (continued)”

line.

Address. Enter a street address where

you can receive overnight deliveries.

!

Do not provide a P.O. box.

CAUTION

Third party. If you receive your mail in

care of a third party (such as an

accountant or an attorney), enter on the

first street address line “C/O” followed by

the third party's name and enter the street

address where the third party can receive

overnight deliveries on the “Address

(continued)” line.

Foreign address. If reporting a

foreign address, include the full name of

the country using uppercase letters in

English. If you file Form 8963

electronically, select the full name of the

country from the drop down in the foreign

country name box. Enter foreign province

or state, and postal code.

Part I. Signature of Official

Signing on Behalf of the

Single-Person Covered Entity

or Designated Entity (Agent of

an Affiliated Group, or Other

Designated Entity) and Consent

by the Designated Entity (if

applicable)

Provide the date signed in MM/DD/YYYY

format, your phone and fax numbers, and

the name and title of your signing official in

print format.

If you file Form 8963 by paper,

manually sign the form.

If you file Form 8963 electronically, do

not manually sign the form. Instead,

manually sign, scan, and upload Form

8453-R with your Form 8963. See How To

File, earlier.

Part II. Alternate Contact

Person Designee

If you want to designate an employee to

discuss the report with the IRS, check the

related box and enter the person’s name,

title, phone number, and fax number, and

Instructions for Form 8963 (Rev. 01-2020)

we will contact that person if we have any

questions concerning the report.

Schedule A. Single-Person

Covered Entity or Controlled

Group Member Information

Enter the single-person covered entity,

common parent of affiliated group, or

designated entity information on the first

line. This information will automatically

populate the first line of Schedule A if you

complete the form electronically. It is

unnecessary to repeat the entity name

and address from page 1 on line 1, but

you must enter all of the premium data

requested for the entity. Complete

additional lines for every person who is a

controlled group member at the end of the

day on December 31, 2019, and who

would qualify as a covered entity in 2020 if

it were a single-person covered entity, and

enter the following information for each

member.

(a) Employer identification number

(EIN). If filing your Form 8963

electronically, enter your 9-digit EIN

without the dash. The EIN will be properly

formatted for you.

(b) Entity name. If you have a trade

name or are doing business under a

different name, enter that name or d/b/a

name.

(c) Address. Enter a street address

where you can receive overnight

deliveries.

If reporting a foreign address, also

include the full name of the country using

uppercase letters in English. Enter the

information in the following order: city,

province or state, and postal code.

(d) and (e) National Association of Insurance Commissioners (NAIC) identification codes. Enter (d) NAIC company

code and (e) NAIC group code for each

single-person covered entity, the common

parent of an affiliated group or designated

entity, and each listed controlled group

member. If you do not have an NAIC

company code or group code for a

covered entity or controlled group

member, leave the related field blank.

(f) Direct premiums written. For each

single-person covered entity or member of

a controlled group, the source of data for

determining direct premiums written is the

Supplemental Health Care Exhibit

(SHCE), filed with the NAIC; the Medical

Loss Ratio (MLR) Annual Reporting Form

(MLR form), filed with the Center for

Consumer Information and Insurance

Oversight (CCIIO); or any equivalent form

required by state or federal law. If the

entity or member does not file an SHCE,

an MLR form, or any equivalent form, the

entity or member is still required to file

Form 8963 and provide direct premiums

Instructions for Form 8963 (Rev. 01-2020)

written for health insurance of U.S. health

risks and any other information required

by this form.

Generally, if the entity files an SHCE

and/or an MLR form, enter the direct

premiums written as reported for the data

year on the SHCE (SHCE, Part 2, line 1.1,

columns 1–10 plus 12) and/or MLR (MLR

form, Part 2, comparable lines and

columns, amounts from the “Total as of

12/31/Data Year” columns only).

References to the SHCE and the

MLR form in these instructions are

CAUTION solely for your convenience in

identifying the premium information

required for this report and are subject to

change.

!

Only include direct premiums written

for health insurance of U.S. health risks.

Exclude from direct premiums written any

premiums for coverage that is not health

insurance for U.S. health risks. For more

information, see the definitions of Health

insurance and U.S. health risk, earlier.

For any covered entity that files the

SHCE with the NAIC, the entire amount

reported on the SHCE as direct premiums

written will be considered to be for health

insurance of U.S. health risks (subject to

any applicable exclusions for amounts that

are not health insurance) unless the

covered entity can demonstrate otherwise.

If the entity does not file an SHCE with

NAIC or an MLR form with CCIIO, or those

forms do not contain the relevant data for

determining all of the direct premiums

written for health insurance for U.S. health

risks of an entity (or member), enter

comparable direct premiums written

information from any equivalent form

required by state or federal law.

If no single form contains all of the

relevant data for determining all of the

direct premiums written for health

insurance for U.S. health risks of an entity

(or member), then direct premiums written

must be determined using aggregated

data from multiple forms. Please include a

reconciliation with the premiums you

reported on the SHCE, MLR form, or

equivalent form required by state or

federal law.

See IRS.gov/ACA9010 for the

treatment of expatriate health plans.

(g) MLR rebates. Enter MLR rebates as

you reported for the 2019 calendar year

to: NAIC on SHCE; CCIIO on the MLR

form; or any other regulatory authority that

specifically requires MLR rebates for other

than commercial markets (Medicare Part

D, Medicare Advantage, Medicaid,

FEHBP, etc.).

Figure the MLR rebates (current year

accrual), as below.

-3-

. . . . . . . . .

$ ________

2. Less estimated rebates

unpaid-prior year . . . . . . . .

$ (_______)

3. Plus estimated rebates

unpaid-current year . . . . . . .

$ _______

4. MLR rebates (current year

accrual). Enter this net amount in

column (g). Place a minus sign in

front of amounts to indicate

negative amounts. . . . . . . .

$ _______

1. Rebates paid

(h) Stand-alone dental or vision direct

premiums written. Enter the amount of

stand-alone dental or vision direct

premiums written as reported to the NAIC

on the SHCE. If you do not file an SHCE,

include direct premiums written for

policies providing for dental only or vision

only coverage issued as a stand-alone

dental or vision policy, or as a rider to a

medical policy through deductibles or

out-of-pocket limits.

(i) Net premiums written. Enter the total

of column (f) minus column (g) plus

column (h) in column (i).

(f) − (g) + (h) = (i)

This is 100% of the amount of net

premiums written for health insurance of

U.S. health risks for the calendar year.

The IRS will compute net premiums

written taken into account (in accordance

with Regulations section 57.4(a)(4)). If

negative, enter “-0-”. Any negative

amounts will be treated as zero for fee

calculation purposes.

(j) Amount in column (i) attributable to

section 501(c)(3), 501(c)(4), 501(c)

(26), or 501(c)(29) entities. All

designated entities or controlled group

members who enter an amount in box j

must be organized as a tax-exempt entity

under section 501(c)(3), 501(c)(4), 501(c)

(26), or 501(c)(29).

Box 1 (or drop down menu). Enter

the section 501(c) paragraph number for

each entity that qualifies for the partial

exclusion, if applicable. Allowable

selections are 3, 4, 26, or 29. The entity

must be one of these types of entities in

order for it to qualify. If you file Form 8963

electronically, select the number of the

paragraph from the drop down box.

Box 2. Enter the portion of net

premiums written included in the total

reported in column (i) for health insurance

premiums that are attributable to certain

exempt activities of a covered entity

qualifying under section 501(c)(3), 501(c)

(4), 501(c)(26), or 501(c)(29) (ACA

section 9010(b)(2)(B), partial exclusion for

certain exempt activities).

Enter 100% of the premiums that

qualify for the exclusion and the IRS will

apply the 50% reduction after application

of the percentage of net premiums written

(see (i) Net premiums written, earlier). If

the amount entered is greater than the net

premiums written reported in column (i), it

will be limited to the amount of column (i)

for that controlled group member for fee

calculation purposes.

Error Correction Process

Each fee year, the IRS will send a

preliminary fee notification to each

covered entity. If the entity believes there

is an error in the notification, the entity

must submit a corrected Form 8963 in the

time and manner specified in the

notification.

Note. If you submit a corrected Form

8963 by e-file, you should receive an

electronic acknowledgement when you

complete the transaction. If you use

another method specified in the

notification, the IRS will mail an

acknowledgement to the address

indicated on the corrected Form 8963. If

you do not receive an acknowledgement

within 10 days of submission, please

contact the IRS by phone at 616-365-4617

(not a toll-free number), by fax at

877-797-0235, or by email at

LBI.IPF@irs.gov.

Disclosure and Paperwork Reduction

Act Notice. We ask for the information on

this form to carry out the Internal Revenue

laws of the United States. You are

required to give us the information. We

need it to ensure that you are complying

with these laws and to allow us to figure

and collect the right fee.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records relating

to a form or its instructions must be

retained as long as their contents may

become material in the administration of

any Internal Revenue law.

Public disclosure, open to public

inspection. Although, generally, returns

and return information are confidential, as

required by section 6103, the information

on this form is not confidential and is not

subject to section 6103 pursuant to ACA

section 9010, as amended. All information

-4-

on this form is subject to public disclosure.

Do not include personal information other

than that required to be disclosed.

The time needed to complete and file

this form will vary depending on individual

circumstances. The estimated average

time is:

Recordkeeping . . . . . .

5 hr., 30 min.

Learning about the

law or the form . . . . . .

53 min.

Preparing the form . .

1 hr., 01 min.

Comments. If you have comments

concerning the accuracy of these time

estimates or suggestions for making this

form simpler, we would be happy to hear

from you. You can send us comments

from IRS.gov/FormComments. Or you can

write to the Internal Revenue Service, Tax

Forms and Publications Division, 1111

Constitution Ave. NW, IR-6526,

Washington, DC 20224. Don’t send the

form to this office.

Instructions for Form 8963 (Rev. 01-2020)