The Internal Revenue released temporary and proposed regulations aimed at clarifying which entities are excluded from being “covered entities” under Section 10 the Act. Covered entities are subject to an annual fee based the net premiums they have written for United States risks.
The temporary regulations clarify that governmental entities and to the extent that they self-insure their employees’ risks may be among those excluded from being “covered entities” for a given “test year.”
The test year, which the entity must select consistently for all years, is either the entire data year ending on the prior December 31st or the entire fee year beginning on January 1st. A further restriction applies if the entity selects the fee year as its test year.
Additionally, the temporary regulations also provide clarification to the rules net premiums for a such covered entities.
The new regulations are effective as February 26, 2015, but the is accepting comments and request for a public hearing until May 27.