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September 12, 2019

IRS Announces ACA Health Insurer Tax Applicable Amount for 2020

The Internal Revenue Service announced on September 3, 2019 that the agency plans to collect over $15 billion from health insurers next year based on an ACA tax pursuant to 26 U.S.C. § 9010 unless Congress acts to further suspend or repeal that levy.  This tax, which is referred to as the “applicable amount,” is allocated among U.S. insurers pursuant to a statutory formula.

The IRS collected the tax in the years 2014 through 2016, and again in 2018. Congress separately suspended collection of the tax for 2017 and 2019. The applicable amount of the tax was $14.3 million for 2018, the most recent year of collection.