CHAPTER 34 - TAXES ON CERTAIN INSURANCE POLICIES
Title 26 > CHAPTER 34
Sections (7)
§ 4371 Imposition of tax
There is hereby imposed, on each policy of insurance, indemnity bond, annuity contract, or policy of reinsurance issued by any foreign insurer or reinsurer, a tax at the following rates: 4 cents on each dollar, or fractional part thereof, of the premium paid on the policy of casualty insurance or the indemnity bond, if issued to or for, or in the name of, an insured as defined in section 4372(d); 1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of life, sickness, or accident insurance, or annuity contract; and 1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of reinsurance covering any of the contracts taxable under paragraph (1) or (2). ( Aug. 16, 1954, ch. 736 , 68A Stat. 521 ; Mar. 13, 1956, ch. 83, § 5(9) , 70 Stat. 49 ; Pub. L. 85–859, title I, § 141(a) , Sept. 2, 1958 , 72 Stat. 1300 ; Pub. L. 86–69, § 3(f)(3) , June 25, 1959 , 73 Stat. 140 ; Pub. L. 89–44, title VIII, § 804(b) , June 21, 1965 , 79 Stat. 160 ; Pub. L. 94–455, title XIX, § 1904(a)(12) , Oct. 4, 1976 , 90 Stat. 1812 ; Pub. L. 98–369, div. A, title II, § 211(b)(23) , July 18, 1984 , 98 Stat. 757 ; Pub. L. 100–203, title X, § 10242(c)(3) , Dec. 22, 1987 , 101 Stat. 1330–423 ; Pub. L. 101–239, title VII, § 7811(i)(11) , Dec. 19, 1989 , 103 Stat. 2411 .)
§ 4372 Definitions
(a) Foreign insurer or reinsurer For purposes of section 4371, the term “foreign insurer or reinsurer” means an insurer or reinsurer who is a nonresident alien individual, or a foreign partnership, or a foreign corporation. The term includes a nonresident alien individual, foreign partnership, or foreign corporation which shall become bound by an obligation of the nature of an indemnity bond. The term does not include a foreign government, or municipal or other corporation exercising the taxing power.
(b) Policy of casualty insurance For purposes of section 4371(1), the term “policy of casualty insurance” means any policy (other than life) or other instrument by whatever name called whereby a contract of insurance is made, continued, or renewed.
(c) Indemnity bond For purposes of this chapter, the term “indemnity bond” means any instrument by whatever name called whereby an obligation of the nature of an indemnity, fidelity, or surety bond is made, continued, or renewed. The term includes any bond for indemnifying any person who shall have become bound or engaged as surety, and any bond for the due execution or performance of any contract, obligation, or requirement, or the duties of any office or position, and to account for money received by virtue thereof, where a premium is charged for the execution of such bond.
(d) Insured For purposes of section 4371(1), the term “insured” means— a domestic corporation or partnership, or an individual resident of the United States, against, or with respect to, hazards, risks, losses, or liabilities wholly or partly within the United States, or a foreign corporation, foreign partnership, or nonresident individual, engaged in a trade or business within the United States, against, or with respect to, hazards, risks, losses, or liabilities within the United States.
(e) Policy of life, sickness, or accident insurance, or annuity contract For the purpose of section 4371(2), the term “policy of life, sickness, or accident insurance, or annuity contract” means any policy or other instrument by whatever name called whereby a contract of insurance or an annuity contract is made, continued, or renewed with respect to the life or hazards to the person of a citizen or resident of the United States.
(f) Policy of reinsurance For the purpose of section 4371(3), the term “policy of reinsurance” means any policy or other instrument by whatever name called whereby a contract of reinsurance is made, continued, or renewed against, or with respect to, any of the hazards, risks, losses, or liabilities covered by contracts taxable under paragraph (1) or (2) of section 4371.
§ 4373 Exemptions
The tax imposed by section 4371 shall not apply to— Any amount which is effectively connected with the conduct of a trade or business within the United States unless such amount is exempt from the application of section 882(a) pursuant to a treaty obligation of the United States. Any indemnity bond required to be filed by any person to secure payment of any pension, allowance, allotment, relief, or insurance by the United States, or to secure a duplicate for, or the payment of, any bond, note, certificate of indebtedness, war-saving certificate, warrant or check, issued by the United States. ( Aug. 16, 1954, ch. 736 , 68A Stat. 522 ; Pub. L. 85–859, title I, § 141(a) , Sept. 2, 1958 , 72 Stat. 1301 ; Pub. L. 94–455, title XIX, § 1904(a)(12) , Oct. 4, 1976 , 90 Stat. 1813 ; Pub. L. 100–647, title I, § 1012(q)(13)(A) , Nov. 10, 1988 , 102 Stat. 3525 .)
§ 4374 Liability for tax
The tax imposed by this chapter shall be paid, on the basis of a return, by any person who makes, signs, issues, or sells any of the documents and instruments subject to the tax, or for whose use or benefit the same are made, signed, issued, or sold. The United States or any agency or instrumentality thereof shall not be liable for the tax. ( Aug. 16, 1954, ch. 736 , 68A Stat. 522 ; Pub. L. 85–859, title I, § 141(a) , Sept. 2, 1958 , 72 Stat. 1301 ; Pub. L. 89–44, title VIII, § 804(a)(1) , (2), June 21, 1965 , 79 Stat. 160 ; Pub. L. 94–455, title XIX, § 1904(a)(12) , Oct. 4, 1976 , 90 Stat. 1813 .)
§ 4375 Health insurance
(a) Imposition of fee There is hereby imposed on each specified health insurance policy for each policy year ending after September 30, 2012 , a fee equal to the product of 1 in the case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy.
(b) Liability for fee The fee imposed by subsection (a) shall be paid by the issuer of the policy.
(c) Specified health insurance policy For purposes of this section: Except as otherwise provided in this section, the term “specified health insurance policy” means any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. The term “specified health insurance policy” does not include any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c). In the case of any arrangement described in subparagraph (B), such arrangement shall be treated as a specified health insurance policy, and the person referred to in such subparagraph shall be treated as the issuer. An arrangement is described in this subparagraph if under such arrangement fixed payments or premiums are received as consideration for any person’s agreement to provide or arrange for the provision of accident or health coverage to residents of the United States, regardless of how such coverage is provided or arranged to be provided.
(d) Adjustments for increases in health care spending In the case of any policy year ending in any fiscal year beginning after September 30, 2014 , the dollar amount in effect under subsection (a) for such policy year shall be equal to the sum of such dollar amount for policy years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of— such dollar amount for policy years ending in the previous fiscal year, multiplied by the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year.
(e) Termination This section shall not apply to policy years ending after September 30, 2029 .
§ 4376 Self-insured health plans
(a) Imposition of fee In the case of any applicable self-insured health plan for each plan year ending after September 30, 2012 , there is hereby imposed a fee equal to 1 in the case of plan years ending during fiscal year 2013) multiplied by the average number of lives covered under the plan.
(b) Liability for fee The fee imposed by subsection (a) shall be paid by the plan sponsor. For purposes of paragraph (1) the term “plan sponsor” means— the employer in the case of a plan established or maintained by a single employer, the employee organization in the case of a plan established or maintained by an employee organization, in the case of— a plan established or maintained by 2 or more employers or jointly by 1 or more employers and 1 or more employee organizations, a multiple employer welfare arrangement, or a voluntary employees’ beneficiary association described in section 501(c)(9), the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan, or the cooperative or association described in subsection (c)(2)(F) in the case of a plan established or maintained by such a cooperative or association.
(c) Applicable self-insured health plan For purposes of this section, the term “applicable self-insured health plan” means any plan for providing accident or health coverage if— any portion of such coverage is provided other than through an insurance policy, and such plan is established or maintained— by 1 or more employers for the benefit of their employees or former employees, by 1 or more employee organizations for the benefit of their members or former members, jointly by 1 or more employers and 1 or more employee organizations for the benefit of employees or former employees, by a voluntary employees’ beneficiary association described in section 501(c)(9), by any organization described in section 501(c)(6), or in the case of a plan not described in the preceding subparagraphs, by a multiple employer welfare arrangement (as defined in section 3(40) of Employee Retirement Income Security Act of 1974), a rural electric cooperative (as defined in section 3(40)(B)(iv) of such Act), or a rural telephone cooperative association (as defined in section 3(40)(B)(v) of such Act).
(d) Adjustments for increases in health care spending In the case of any plan year ending in any fiscal year beginning after September 30, 2014 , the dollar amount in effect under subsection (a) for such plan year shall be equal to the sum of such dollar amount for plan years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of— such dollar amount for plan years ending in the previous fiscal year, multiplied by the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year.
(e) Termination This section shall not apply to plan years ending after September 30, 2029 .
§ 4377 Definitions and special rules
(a) Definitions For purposes of this subchapter— The term “accident and health coverage” means any coverage which, if provided by an insurance policy, would cause such policy to be a specified health insurance policy (as defined in section 4375(c)). The term “insurance policy” means any policy or other instrument whereby a contract of insurance is issued, renewed, or extended. The term “United States” includes any possession of the United States.
(b) Treatment of governmental entities For purposes of this subchapter— the term “person” includes any governmental entity, and notwithstanding any other law or rule of law, governmental entities shall not be exempt from the fees imposed by this subchapter except as provided in paragraph (2). In the case of an exempt governmental program, no fee shall be imposed under section 4375 or section 4376 on any covered life under such program. For purposes of this subchapter, the term “exempt governmental program” means— any insurance program established under title XVIII of the Social Security Act, the medical assistance program established by title XIX or XXI of the Social Security Act, any program established by Federal law for providing medical care (other than through insurance policies) to individuals (or the spouses and dependents thereof) by reason of such individuals being members of the Armed Forces of the United States or veterans, and any program established by Federal law for providing medical care (other than through insurance policies) to members of Indian tribes (as defined in section 4(d) of the Indian Health Care Improvement Act).
(c) Treatment as tax For purposes of subtitle F, the fees imposed by this subchapter shall be treated as if they were taxes.
(d) No cover over to possessions Notwithstanding any other provision of law, no amount collected under this subchapter shall be covered over to any possession of the United States.