PRIA, Government Policy, Made Personal

Summary

Any employer (including someone self-employed) or employee organization that pays into a health plan that does not meet certain Medicare rules must pay a tax. The tax is 25% of the amount the employer or organization spent that year for each such plan. A "group health plan" is a plan an employer or employee group pays into to give health care to workers, former workers, people connected to the business, or their families. A "large group health plan" is the same but covers employees of at least one employer that normally had 100 or more workers on a typical business day in the prior year; related companies are counted as one employer, affiliated service group members are treated as from one employer, and leased employees are counted as employees when tax rules treat them that way. A "nonconforming group health plan" is one that at any time in the year fails to meet the requirements in section 1862(b) of the Social Security Act. "Employer" does not include federal or other government entities.

Title 26, §5000

Internal Revenue Code, Source: USLM XML via OLRC

(a)Imposition of tax

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)Group health plan and large group health plan

For purposes of this section

(1) Group health plan

(2)Large group health plan

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)Nonconforming group health plan

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)Government entities

For purposes of this section, the term “employer” does not include a Federal or other governmental entity.

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.

§5000 Certain Group Health Plans

Summary

Title 26, §5000

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Effective Date

Effective Date

Effective Date

Citations & Metadata