Read the statutory language applicable to this section

Federal agency guidance

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In a disqualified tax year, applicable individual remuneration for services performed is not deductible above $500,000. A disqualified tax year is any year in which the employer is a covered health insurance provider. Applicable individuals include officers, directors and employees of, as well as those who provide services for, a health insurance provider.

Covered Health Insurance Provider

For tax years beginning after December 31, 2009 and before January 1, 2013, a covered health insurance provider is an employer that is a health insurance issuer receiving premiums from health insurance coverage.

For tax years after December 31, 2012, a covered health insurance provider is an employer that is a health insurance issuer that receives gross premiums from health insurance coverage such that not less than 25 percent of those premiums is from essential health care benefits.

Essential Health Benefits

Essential health benefits as defined elsewhere in the Act are to be defined by the Secretary of HHS but must include at least the following general categories and the items and services covered within the categories:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services, including behavioral health treatment;
  • Prescription drugs;
  • Rehabilitative and habilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management;and
  • Pediatric services, including oral and vision care.