PPACA Sec. 10905

 

SEC. 10905. MODIFICATION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.

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(a) DETERMINATION OF FEE AMOUNT.—Subsection (b) of section 9010 of this Act is amended to read as follows:

 

‘‘(b) DETERMINATION OF FEE AMOUNT.—

‘‘(1) IN GENERAL.—With respect to each covered entity, the fee under this section for any calendar year shall be equal to an amount that bears the same ratio to the applicable amount as—

‘‘(A) the covered entity’s net premiums written with respect to health insurance for any United States health risk that are taken into account during the preceding calendar year, bears to

‘‘(B) the aggregate net premiums written with respect to such health insurance of all covered entities that are taken into account during such preceding calendar year.

‘‘(2) AMOUNTS TAKEN INTO ACCOUNT.—For purposes of paragraph (1), the net premiums written with respect to health

insurance for any United States health risk that are taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the following table:

 

                                                                  ‘‘With respect to a covered entity’s net premiums

                                                                        written during the calendar year that are

 

                                                                                 The percentage of net premiums written 

                                                                                       that are taken    into account is:

Not more than $25,000,000 .....................                                   0 percent

More than $25,000,000 but not more than $50,000,000.            50 percent

More than $50,000,000 .............................                             100 percent.

‘‘(3) SECRETARIAL DETERMINATION.—The Secretary shall calculate the amount of each covered entity’s fee for any calendar

year under paragraph (1). In calculating such amount, the Secretary shall determine such covered entity’s net premiums written with respect to any United States health risk on the basis of reports submitted by the covered entity under subsection (g) and through the use of any other source of information available to the Secretary.’’.

(b) APPLICABLE AMOUNT.—Subsection (e) of section 9010 of this Act is amended to read as follows:

 

‘‘(e) APPLICABLE AMOUNT.—For purposes of subsection (b)(1), the applicable amount shall be determined in accordance with the

following table:

‘‘Calendar year Applicable amount

2011 ........................................................... $2,000,000,000

2012 ........................................................... $4,000,000,000

2013 ........................................................... $7,000,000,000

2014, 2015 and 2016 ................................. $9,000,000,000

2017 and thereafter .................................. $10,000,000,000.’’.

 

(c) EXEMPTION FROM ANNUAL FEE ON HEALTH INSURANCE FOR CERTAIN NONPROFIT ENTITIES.—Section 9010(c)(2) of this Act is amended by striking ‘‘or’’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting a comma, and by adding at the end the following new subparagraphs:

 

‘‘(C) any entity—

‘‘(i)(I) which is incorporated as, is a wholly owned subsidiary of, or is a wholly owned affiliate of, a nonprofit corporation under a State law, or

‘‘(II) which is described in section 501(c)(4) of the Internal Revenue Code of 1986 and the activities of which consist of providing commercial-type insurance (within the meaning of section 501(m) of such Code),

‘‘(ii) the premium rate increases of which are regulated by a State authority,

‘‘(iii) which, as of the date of the enactment of this section, acts as the insurer of last resort in the State and is subject to State guarantee issue requirements,and

‘‘(iv) for which the medical loss ratio (determined in a manner consistent with the determination of such ratio under section 2718(b)(1)(A) of the Public Health Service Act) with respect to the individual insurance market for such entity for the calendar year is not

less than 100 percent,

‘‘(D) any entity—

‘‘(i)(I) which is incorporated as a nonprofit corporation under a State law, or

‘‘(II) which is described in section 501(c)(4) of the Internal Revenue Code of 1986 and the activities of which consist of providing commercial-type insurance (within the meaning of section 501(m) of such Code), and

‘‘(ii) for which the medical loss ratio (as so determined)—

‘‘(I) with respect to each of the individual, small group, and large group insurance markets for such entity for the calendar year is not less than 90 percent, and

‘‘(II) with respect to all such markets for such entity for the calendar year is not less than 92 percent, or

‘‘(E) any entity—

‘‘(i) which is a mutual insurance company,

‘‘(ii) which for the period reported on the 2008 Accident and Health Policy Experience Exhibit of the National Association of Insurance Commissioners had—

‘‘(I) a market share of the insured population of a State of at least 40 but not more than 60 percent, and

‘‘(II) with respect to all markets described in subparagraph (D)(ii)(I), a medical loss ratio of not less than 90 percent, and

‘‘(iii) with respect to annual payment dates in calendar years after 2011, for which the medical loss ratio (determined in a manner consistent with the determination of such ratio under section 2718(b)(1)(A) of the Public Health Service Act) with respect to all

such markets for such entity for the preceding calendar year is not less than 89 percent (except that with respect to such annual payment date for 2012, the calculation under 2718(b)(1)(B)(ii) of such Act is determined by reference to the previous year, and with

respect to such annual payment date for 2013, such calculation is determined by reference to the average for the previous 2  years).’’.

(d) CERTAIN INSURANCE EXEMPTED FROM FEE.—Paragraph (3) of section 9010(h) of this Act is amended to read as follows:

‘‘(3) HEALTH INSURANCE.—The term ‘health insurance’ shall not include—

‘‘(A) any insurance coverage described in paragraph (1)(A) or (3) of section 9832(c) of the Internal Revenue Code of 1986,

‘‘(B) any insurance for long-term care, or

‘‘(C) any medicare supplemental health insurance (as defined in section 1882(g)(1) of the Social Security Act).’’.

(e) ANTI-AVOIDANCE GUIDANCE.—Subsection (i) of section 9010 of this Act is amended by inserting ‘‘and shall prescribe such regulations as are necessary or appropriate to prevent avoidance of the purposes of this section, including inappropriate actions taken to

qualify as an exempt entity under subsection (c)(2)’’ after ‘‘section’’.

(f) CONFORMING AMENDMENTS.—

(1) Section 9010(a)(1) of this Act is amended by striking ‘‘2009’’ and inserting ‘‘2010’’.

(2) Section 9010(c)(2)(B) of this Act is amended by striking ‘‘(except’’ and all that follows through ‘‘1323)’’.

(3) Section 9010(c)(3) of this Act is amended by adding at the end the following new sentence: ‘‘If any entity described in subparagraph (C)(i)(I), (D)(i)(I), or (E)(i) of paragraph (2) is treated as a covered entity by reason of the application of the preceding sentence, the net premiums written with respect to health insurance for any United States health risk of such entity shall not be taken into account for purposes

of this section.’’.

(4) Section 9010(g)(1) of this Act is amended by striking ‘‘and third party administration agreement fees’’.

(5) Section 9010(j) of this Act is amended—

(A) by striking ‘‘2008’’ and inserting ‘‘2009’’, and (B) by striking ‘‘, and any third party administration agreement fees received after such date’’.

(g) EFFECTIVE DATE.—The amendments made by this section shall take effect as if included in the enactment of section 9010.

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