Treasury Informs Senator That Proposed Insurer Fee Regs Aren't Subject to OMB Review

Thank you for your letter regarding the regulations on the annual health insurer fee implementing section 9010 of the Patient Protection and Affordable Care Act (ACA).

Section 9010 of the ACA imposes an allocated fee on entities engaged in the business of providing health insurance. The aggregate amount of the annual fee to be paid by the health insurance providers is set forth in the statute. The proposed regulations, which the Department of the Treasury and the Internal Revenue Service (IRS) released in March 2013, provide clarity as to which types of coverage are considered health insurance for purposes of the fee and define certain terms used in the statute. In addition, the regulations provide rules for reporting and paying the fee, and outline an error correction process for use by health insurance providers after reviewing an initial fee calculation generated by the IRS.

Your letter raises questions about the applicability of Executive Order 12866 to the regulations. The Office of Management and Budget (OMB) designates and reviews "significant regulatory actions" as that term is defined in section 3(f) of E.O. 12866. With respect to IRS rules, pursuant to OMB guidance implementing E.O. 12866, and longstanding agreements between OMB and Treasury, only IRS legislative rules that constitute "significant regulatory actions" are subject to E.O. 12866 review. The regulations implementing section 9010 are not legislative rules. Thus, pursuant to longstanding practice across several Administrations, they are not subject to E.O. 12866 review.

We appreciate your attention to the proposed regulations. We are carefully considering all comments we receive on the proposed regulations, and we intend to continue to work with health insurance providers as the fee is implemented. If you have any further questions, please contact Sandra Salstrom, Office of Legislative Affairs, at (202) 622-1900.