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IRS seeks comment on health care reform law tax assessment


WASHINGTON—The Internal Revenue Service is asking for comments on a health care reform law provision that will impose a small special assessment on employers with self-funded health care plans.

Initially, the tax set to begin in 2012 will be $1 for each health care plan enrollee. It will rise to $2 per plan enrollee in 2013.

The total amount of the tax is based on the “average number of lives” in the plan during a year, according to IRS Notice 2011-35. It also seeks comments on how future regulatory guidance could reduce the administrative burden on employers in computing the average number of lives in their self-funded plans.

Counting dependents

Additionally, the IRS wants to know if the upcoming guidance should include a safe harbor that would allow plan sponsors to compute the average number of lives covered “using a formula based on the number of participants and one or more additional factors that account for the number of dependents without requiring that actual dependents covered under the plan be counted.”

The revenue generated by the new tax, which also will apply to insured plans, is to be used to evaluate, among other things, the outcomes of various medical treatments.

The congressional Joint Committee on Taxation estimated last year that the tax would raise a total of $2.6 billion in revenues through its scheduled expiration date of Sept. 30, 2019.

Comments can be emailed to

Notice 2011-35 should be included in the subject line. Comments are due by Sept. 6.

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