article 4 - sale. However, for insurance industries the...

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Alysse Johnson Pharmacos, Health Insurers: The Bad Boys of Health Reform? On July FASB issued an accounting standards update about the guidance on how certain fees on pharmaceutical manufacturers and health insurers are remitted to the US Treasury; under the Patient Protection and Affordable Health Care Act, which was amended by the Health Care and Education Reconciliation Act. These are fees that are non-tax deductable. Also for pharmaceutical manufacturers the annual fee is based on the amount of their branded prescription-drug sales for the preceding year as a percent of the industries branded prescription- drug sales for the same period. This fee then becomes in affect and payable to the US Treasury once the entity has a gross receipt from the branded prescription-drug sales on or after January 1, 2011. The liability related to the annual fee must be estimated and recorded in full upon the first
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Unformatted text preview: sale. However, for insurance industries the annual fee is allocated to individual health insurers based on a ration amount of an entities net premium written during the preceding calendar year to the amount of health insurance for any US health risk written during the preceding calendar year. This fee becomes affective and payable to the US Treasury once the health insurance is provided on or after January 1, 2014. Also the liability must be estimated and recorded when the health care is provided in the applicable year. Both industries must record a corresponding deferred cost that is amortized to expense using the straight line method or another method that better allocates the fee over the payable calendar year. http://www3.cfo.com/article/2011/10/tax_fasb-update-on-patient-protection-act-fees-paid-by-pharmaceuticals-health-insurers-non-tax-deductible-...
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This note was uploaded on 11/02/2011 for the course ACC 101 taught by Professor Johnson during the Spring '11 term at Cardinal Stritch.

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