IRS Updates Form 8928 for Self-Reporting of Excises Taxes Owed for PPACA Failures

The IRS recently updated Excise Tax Form 8928 and its Instructions. Employers and plan sponsors must use Form 8928 to report excises taxes due for failures to meet certain requirements of the Public Health Services Act, COBRA, HIPAA or HSA comparable contributions. The revised Form 8928 and Instructions now incorporate the excise taxes under Code § 4980D created by the Patient Protection and Affordable Care Act (“PPACA”).

PPACA created several new reporting and compliance standards for plans and employers. The following chart lists some of those new requirements and their effective dates. Failure to meet any of these must be reported on Form 8928 starting in 2012 as of the due date of the employer’s federal income tax return. In general, the penalty assessed under Code § 4980D is $100 per day, per affected participant for as long as the plan is non-compliant.

Effective Now For All Plans

  • Special enrollment notice regarding coverage for children under age 26.
  • Special enrollment notice required for those who previously lost health plan eligibility upon reaching their plan’s lifetime.
  • No lifetime dollar limits or unreasonable annual dollar limits on essential health benefits. For more information on lifetime and annual limits, please see our earlier post on this topic.
  • No rescission of health plan coverage except in cases of intentional misrepresentation of a material act or fraud.
  • No pre-existing condition exclusions for children under age 19.

Effective Now For Non-Grandfathered Plans

  • Notice in the SPD regarding participants’ right to designate their primary care provider or pediatrician or obtain obstetrical or gynecological care without prior authorization (only if plan has this requirement). For more information about PPACA’s notice requirements, please see our earlier post on this topic.
  • Implementation of an effective appeals process and notice of the plan’s appeal process and available assistance from a health care ombudsman (effective for plan years beginning on or after July 1, 2011, with some provisions effective January 1, 2012 under the enforcement grace period.
  • Disclosure to HHS and the State Insurance Commissioner including the following information (technically effective now, but HHS has not released its guidance):
    • o Claims payment policies and practices;
    • o Periodic financial disclosures;
    • o Data on enrollment, disenrollment, number of denied claims, and rating practices;
    • o Information on cost-sharing and payments with respect to out-of-network coverage;
    • o Information on enrollee and participant rights; and
    • o Other information as determined by the Secretary of HHS.
  • Provide specified preventive-care services (e.g., immunizations, screenings) without cost sharing.
  • Cover emergency services without prior authorization and without out-of-network expenses, with the same cost sharing as in-network emergency services.
  • If a group health plan covers dependents, it must cover an employee’s adult children (even if married) through age 26. Prior to 2014, grandfathered plans are not required to cover adult children who are eligible for other employer-sponsored coverage.

Effective Date To Be Determined

  • Creation and distribution of a Summary of Benefits and Coverage (“Mini-SPD”) (this provision was originally effective March 23, 2012 but that date has been extended until a date to be determined in the DOL’s final rule. For more information, please see our earlier post on this extension and the FAQs About Affordable Care Act Implementation Part VII and Mental Health Parity Act).

A group health plan or employer that fails to comply with any of these provisions must self-report its compliance failures on Form 8928 and, when filing that Form, pay the Code § 4980D excise tax of $100 a day per affected individual. The IRS may waive all or part of the excise tax if it determines that reasonable cause exists for the compliance error or that the penalties are excessive for the plan’s failure. Group health plans and employers should confirm that the appropriate provisions of PPACA are implemented by the required effective date to avoid excise taxes.

Today’s post was contributed by Maureen Maly.


  1. Ann Cloyd says:

    the last paragraph under Non-Grandfathered plans, it stated that dependent children up to age 26 may remain on their parents plan “even if they are married”.

    However, according to the law – unless what i have has been amended -dependents cannot be married. i have done a cut and past below of what i have verifying my statement.

    ‘‘(a) IN GENERAL.—A group health plan and a health insurance
    issuer offering group or individual health insurance coverage that
    provides dependent coverage of children shall continue to make
    such coverage available for an adult child (who is not married)
    until the child turns 26 years of age. Nothing in this section shall
    require a health plan or a health insurance issuer described in
    the preceding sentence to make coverage available for a child of
    a child receiving dependent coverage.

    Please tell me what to believe.

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