IRS Instruction 8963 – If you’re a health insurance provider, insurer, or part of a controlled group handling U.S. health risks, you’ve likely encountered IRS Form 8963 and its official instructions. IRS Instruction 8963 provides detailed guidance on reporting net premiums written for health insurance. Although the underlying annual fee was repealed after 2020, the form and instructions remain important historical references for compliance, corrections, or audits.
This comprehensive, up-to-date guide (as of 2026) draws directly from official IRS sources, including the latest available Instructions for Form 8963 (Rev. January 2020) and the About Form 8963 page. Download the full PDF here: https://www.irs.gov/pub/irs-pdf/i8963.pdf.
What Is IRS Form 8963 and Instruction 8963?
Form 8963, titled Report of Health Insurance Provider Information, requires covered entities to report net premiums written for health insurance covering U.S. health risks. The IRS uses this data to calculate the annual health insurance provider fee (also known as the IPF or ACA Section 9010 fee).
IRS Instruction 8963 explains:
- Who must file
- Key definitions
- How to calculate and report premiums
- Filing methods (paper vs. electronic)
- Controlled group rules
- Error correction procedures
The instructions were last revised in January 2020 (posted February 18, 2020) and apply specifically to the 2020 fee year.
Official IRS Resources:
Background: The ACA Health Insurance Provider Fee (Section 9010)
Enacted under the Affordable Care Act (ACA) in 2010 (with modifications in later laws), Section 9010 imposed an annual fee on certain health insurance providers. The fee helped fund ACA provisions and was calculated based on each entity’s share of total net premiums written for U.S. health risks.
Covered entities filed Form 8963 annually during the “fee year” (the year the fee was due) to report data from the prior “data year.”
Critical Update: The Fee Was Repealed After 2020
The Further Consolidated Appropriations Act, 2020 (signed December 20, 2019) repealed the annual health insurance provider fee for calendar years beginning after December 31, 2020.
2020 was the final fee year. No fee applies for 2021 or later, and no new Form 8963 filings are required for post-2020 periods. The IRS still hosts the 2020 form and instructions as archival/reference materials (last reviewed January 23, 2026).
Entities may still need to reference them for:
- Correcting prior-year filings
- Audits or inquiries
- Historical compliance reviews
Who Must File Form 8963 (2020 Fee Year Only)?
Generally, any covered entity that provided health insurance for any U.S. health risk during the 2020 fee year had to file.
A covered entity includes:
- Health insurance issuers (per IRC Section 9832(b)(2))
- Health maintenance organizations (HMOs) (Section 9832(b)(3))
- Insurance companies taxable under Subchapter L (or that would be but for Section 501(a) exemption)
- Insurers providing coverage under Medicare Advantage, Medicare Part D, or Medicaid
- Non-fully insured multiple employer welfare arrangements (MEWAs)
Controlled groups are treated as a single covered entity under ACA rules (Sections 52(a), 52(b), 414(m), or 414(o)). A designated entity files on behalf of the entire group.
Single-person covered entities file independently.
Key Definitions from IRS Instruction 8963
- Net premiums written: Premiums written (including reinsurance) minus reinsurance ceded, ceding commissions, and medical loss ratio (MLR) rebates for the data year. Includes assumption reinsurance but excludes indemnity reinsurance.
- U.S. health risk: Health risk of a U.S. citizen, U.S. resident (Section 7701(b)(1)(A)), or anyone located in the U.S. during that period.
- Health insurance: Benefits for medical care under hospital/medical service policies, plans, or HMO contracts. Includes stand-alone dental/vision and retiree-only coverage; excludes most other excepted benefits.
How and When to File (2020 Instructions)?
Due Date: April 15, 2020 (for the 2020 fee year).
Electronic Filing Requirement:
- Mandatory if reporting more than $25 million in net premiums written (including corrected forms).
- Use IRS e-file with Form 8453-R (Electronic Filing Declaration for Form 8963).
- Fax option (one-time for 2020): 877-797-0235.
Paper Filing (if ≤ $25 million):
- Mail to: Internal Revenue Service, 1973 Rulon White Blvd., Mail Stop 4916 IPF, Ogden, UT 84201-0051.
- Also fax a copy to 877-797-0235.
- Use flat envelope; no staples.
Public Disclosure Note: All information on Form 8963 is subject to public inspection/disclosure (not protected under Section 6103).
Step-by-Step Guide: Completing Form 8963 per IRS Instruction 8963
- Covered Entity Information (Page 1):
- Check Box 1 (single-person) or Box 2a/2b (designated entity).
- Enter EIN, entity name, address (no P.O. boxes; overnight delivery address required).
- Indicate number of controlled group members on Schedule A.
- Sign Part I (manual signature for paper; Form 8453-R for e-file).
- Optional: Designate alternate contact in Part II.
- Schedule A – Member Information (One line per member, including the designated entity on line 1):
- (a) EIN
- (b) Entity name (include DBA)
- (c) Address (full foreign details if applicable)
- (d) NAIC company code
- (e) NAIC group code (leave blank if none)
- Premium Reporting Columns (f)–(j):
- (f) Direct premiums written: Primarily from Supplemental Health Care Exhibit (SHCE) Part 2 or MLR Annual Reporting Form (use only “Total as of 12/31/Data Year” columns). Only U.S. health risks; reconcile if using multiple sources.
- (g) MLR rebates: Current-year accrual (paid + unpaid current – unpaid prior).
- (h) Stand-alone dental or vision direct premiums written.
- (i) Net premiums written = (f) – (g) + (h). Enter –0– if negative.
- (j) Exempt activities amount (for qualifying 501(c)(3), (4), (26), or (29) entities; IRS applies 50% reduction).
Error Correction: Submit a corrected Form 8963 if you receive a preliminary fee notice with errors. Follow the specific timing/method in the notice.
Penalties and Compliance
While the instructions focus on reporting, Treasury Regulations Section 57.3 impose penalties for failure to file timely, accurately, or completely. Always consult a tax professional for your situation.
Download Official Documents
- IRS Instruction 8963 PDF (full 4-page guide): https://www.irs.gov/pub/irs-pdf/i8963.pdf
- Form 8963 PDF: Available on the IRS forms page.
- Check IRS.gov/Form8963 for any future developments (though none expected post-repeal).
Final Thoughts on IRS Instruction 8963
IRS Instruction 8963 offered clear, detailed steps for health insurance providers to report critical premium data under the ACA’s now-repealed provider fee. While filing is no longer required for current years, understanding these instructions remains valuable for historical reference, due diligence, or resolving legacy matters.
For personalized advice, consult a qualified tax advisor or attorney familiar with ACA reporting. Always verify the latest on IRS.gov, as forms and rules can evolve.
This guide is for informational purposes only and is not tax or legal advice. All details are sourced directly from official IRS publications as of February 2026.