Title 26 — Internal Revenue CodeRelease 119-73
§5000 Certain group health plans
Title 26 › Subtitle Subtitle D— - Miscellaneous Excise Taxes › Chapter CHAPTER 47— - CERTAIN GROUP HEALTH PLANS › § 5000
Summary
A 25% tax applies to any employer (including someone self‑employed) or employee organization that puts money into a nonconforming group health plan. The tax is 25% of what the employer or organization spends in a calendar year for each plan that does not meet certain rules. Group health plan: an employer‑sponsored health plan (including self‑insured) that covers employees, former employees, people tied to the employer, or their families. Large group health plan: a group plan that covers at least one employer that normally had 100 or more employees on a typical business day in the prior year (related employers and leased employees are combined under rules in sections 52, 414(m), and 414(n)). Nonconforming group health plan: a plan that at any time fails to meet the requirements in section 1862(b) of the Social Security Act. Employer: does not include federal or other government entities.
Full Legal Text
Title 26, §5000
Internal Revenue Code — Source: USLM XML via OLRC
(a)There is hereby imposed on any employer (including a self-employed person) or employee organization that contributes to a nonconforming group health plan a tax equal to 25 percent of the employer’s or employee organization’s expenses incurred during the calendar year for each group health plan to which the employer or employee organization contributes.
(b)For purposes of this section—
(1)The term “group health plan” means a plan (including a self-insured plan) of, or contributed to by, an employer (including a self-employed person) or employee organization to provide health care (directly or otherwise) to the employees, former employees, the employer, others associated or formerly associated with the employer in a business relationship, or their families.
(2)The term “large group health plan” means a plan of, or contributed to by, an employer or employee organization (including a self-insured plan) to provide health care (directly or otherwise) to the employees, former employees, the employer, others associated or formerly associated with the employer in a business relationship, or their families, that covers employees of at least one employer that normally employed at least 100 employees on a typical business day during the previous calendar year. For purposes of the preceding sentence—
(A)all employers treated as a single employer under subsection (a) or (b) of section 52 shall be treated as a single employer,
(B)all employees of the members of an affiliated service group (as defined in section 414(m)) shall be treated as employed by a single employer, and
(C)leased employees (as defined in section 414(n)(2)) shall be treated as employees of the person for whom they perform services to the extent they are so treated under section 414(n).
(c)For purposes of this section, the term “nonconforming group health plan” means a group health plan or large group health plan that at any time during a calendar year does not comply with the requirements of subparagraphs (A) and (C) or subparagraph (B), respectively, of paragraph (1), or with the requirements of paragraph (2), of section 1862(b) of the Social Security Act.
(d)For purposes of this section, the term “employer” does not include a Federal or other governmental entity.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
section 1862(b) of the Social Security Act, referred to in subsec. (c), is classified to section 1395y(b) of Title 42, The Public Health and Welfare.
Amendments
1993—Subsec. (a). Pub. L. 103–66, § 13561(e)(2)(A)(i), which directed insertion of “(including a self-employed person)” after “employer”, was executed by making the insertion after “employer” the first time it appeared, to reflect the probable intent of Congress. Subsec. (b)(1). Pub. L. 103–66, § 13561(e)(2)(A)(ii), amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The term ‘group health plan’ means any plan of, or contributed to by, an employer (including a self-insured plan) to provide health care (directly or otherwise) to the employer’s employees, former employees, or the families of such employees or former employees.” Subsec. (b)(2). Pub. L. 103–66, § 13561(d)(2), inserted at end “For purposes of the preceding sentence—” and added subpars. (A) to (C). Subsec. (c). Pub. L. 103–66, § 13561(e)(2)(A)(iii), substituted “of paragraph (1), or with the requirements of paragraph (2), of section 1862(b)” for “of section 1862(b)(1)”. 1989—Pub. L. 101–239, § 6202(b)(2)(A), struck out “large” after “Certain” in section catchline. Subsec. (a). Pub. L. 101–239, § 6202(b)(2)(B), substituted “group health plan” for “large group health plan” in two places. Subsec. (b). Pub. L. 101–239, § 6202(b)(2)(C), substituted “Group health plan and large” for “Large” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘large group health plan’ means a plan of, or contributed to by, an employer or employee organization (including a self-insured plan) to provide health care (directly or otherwise) to the employees, former employees, the employer, others associated or formerly associated with the employer in a business relationship, or their families, that covers employees of at least one employer that normally employed at least 100 employees on a typical business day during the previous calendar year.” Subsec. (c). Pub. L. 101–239, § 6202(b)(2)(C), substituted “group” for “large group” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘nonconforming large group health plan’ means a large group health plan that at any time during a calendar year does not comply with the requirements of section 1862(b)(4)(A)(i) of the Social Security Act.”
Statutory Notes and Related Subsidiaries
Effective Date
of 1993 Amendment Pub. L. 103–66, title XIII, § 13561(d)(3), Aug. 10, 1993, 107 Stat. 594, provided that: “The
Amendments
made by this subsection [amending this section and section 1395y of Title 42, The Public Health and Welfare] shall take effect 90 days after the date of the enactment of this Act [Aug. 10, 1993].”
Effective Date
of 1989 AmendmentAmendment by Pub. L. 101–239 applicable to items and services furnished after Dec. 19, 1989, see section 6202(b)(5) of Pub. L. 101–239, set out as a note under section 162 of this title.
Effective Date
Section applicable to items and services furnished on or after Jan. 1, 1987, see section 9319(f) of Pub. L. 99–509, set out as an
Effective Date
of 1986 Amendment note under section 1395y of Title 42, The Public Health and Welfare.
Reference
Citations & Metadata
Citation
26 U.S.C. § 5000
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73