Form 8928 - Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code

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Instructions for Form 8928

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Instructions for Form 8928

Department of the Treasury
Internal Revenue Service

(June 2009)
Return of Certain Excise Taxes Under Chapter 43
of the Internal Revenue Code
Section references are to the Internal
Revenue Code unless otherwise noted.

(HSA) contributions for all participating
employees.

General Instructions When to File
Purpose of Form
File Form 8928 to report the tax due on
the following failures by group health
plans or employers.
• A failure to satisfy continuation
coverage requirements under section
4980B.
• A failure to meet portability, access,
and renewability requirements under
section 4980D.
• A failure to make comparable Archer
MSA contributions under section
4980E.
• A failure to make comparable health
savings account (HSA) contributions
under section 4980G.

Who Must File
Form 8928 must be filed by:
1. Any employer, group health plan,
plan administrator, or plan sponsor
liable for the tax under section 4980B
for failure to offer continuation coverage
to a qualified beneficiary.
2. Any employer or group health
plan liable for the tax under section
4980D for failure to comply with the
following group health plan
requirements.
a. Limitation on preexisting
condition exclusion period under
section 9801.
b. Nondiscrimination in eligibility to
enroll and premium contributions under
section 9802.
c. Guaranteed renewability to
employers in a multiemployer or
multiple employer welfare arrangement
under section 9803.
d. 48-hour hospital length of stay in
connection with childbirth for mothers
and newborns under section 9811.
e. Parity in mental health benefits
and substance use disorder benefits
under section 9812.
3. Any employer liable for the tax
under section 4980E for failure to make
comparable Archer medical savings
account (MSA) contributions for all
participating employees.
4. Any employer liable for the tax
under section 4980G for failure to make
comparable health savings account

For a failure under section 4980B or
section 4980D, if the failure is by an
employer or other person responsible
for providing or administering benefits
under the plan (such as an insurer or
third-party administrator), file Form
8928 on or before the due date for filing
the person’s federal income tax return.
If the failure under sections 4980B or
section 4980D is by a multiemployer or
multiple employer plan, file Form 8928
on or before the last day of the seventh
month following the end of the plan
year.
For a failure under section 4980E or
section 4980G, file Form 8928 on or
before the 15th day of the fourth month
following the calendar year in which the
noncomparable contributions were
made.
Extension. File Form 7004,
Application for Automatic Extension of
Time to File Certain Business Income
Tax, Information, and Other Returns, to
request an automatic extension of time
to file Form 8928. You must file Form
7004 on or before the regular due date
of Form 8928. See the instructions for
Form 7004 for more information. Form
7004 does not extend the time to pay
excise taxes due under Form 8928.

Where To File
File Form 8928 at the following
address.
Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999-0009
Private delivery services. You can
use certain private delivery services
designated by the IRS to meet the
“timely mailing as timely filing/paying”
rule for tax returns and payments.
These private delivery services include
only the following:
• DHL Express (DHL): DHL Same Day
Service, DHL Next Day 10:30 a.m.,
DHL Next Day 12:00 p.m., DHL Next
Day 3:00 p.m., DHL 2nd Day Service.
• Federal Express (FedEx): FedEx
Priority Overnight, FedEx Standard
Overnight, FedEx 2Day, FedEx
Cat. No. 52470C

International Priority, and FedEx
International First.
• United Parcel Service (UPS): UPS
Next Day Air, UPS Next Day Air Saver,
UPS 2nd Day Air, UPS 2nd Day Air
A.M., UPS Worldwide Express Plus,
and UPS Worldwide Express.
The private delivery service can tell
you how to get written proof of the
mailing date.

Interest and Penalties
Interest. Interest is charged on taxes
not paid by the due date even if an
extension of time to file is granted.
Interest is also charged on penalties
imposed from the due date, including
extensions, to the date of payment for
failure to file, negligence, fraud, gross
valuation overstatements, and
substantial understatements of tax. The
interest rate is determined under
section 6621.
Penalty for late filing of return. If
you do not file a return by the due date,
including extensions, you may have to
pay a penalty of 5% of the unpaid tax
for each month or part of a month the
return is late, up to a maximum of 25%
of the unpaid tax. The minimum penalty
for a return that is more than 60 days
late is the smaller of the tax due or
$100. The penalty will not be imposed if
you can show that the failure to file on
time was due to reasonable cause. If
you file late, you must attach a
statement to Form 8928 explaining the
reasonable cause.
Penalty for late payment of tax. If
you do not pay the tax when due, you
may have to pay a penalty of 1/2 of 1%
of the unpaid tax for each month or part
of a month the tax is not paid, up to a
maximum of 25% of the unpaid tax.
The penalty will not be imposed if you
can show that the failure to pay on time
was due to reasonable cause.
Interest and penalties for late filing
and late payment will be billed
separately after the return is filed.

Claim for Refund or
Credit/Amended Return
File an amended Form 8928 for any of
the following:
• To claim a refund of overpaid taxes
reportable on Form 8928;

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• To receive a credit for overpaid
taxes; or
• To report additional taxes due within
the same tax year of the filer if those
taxes have the same due date as those
previously reported.
File an amended return by writing
“Amended Return” at the top of Form
8928 and completing the appropriate
part.
If you file an amended return to
claim a refund or credit, the claim must
state in detail the reasons for claiming
the refund. In order for the IRS to
promptly consider your claim, you must
explain why you are filing the claim and
provide the appropriate supporting
evidence. See Regulations section
301.6402-2 for more details.

Specific Instructions
Filer tax year. Enter the tax year of
the employer, entity, or individual on
whom the tax is imposed by using the
plan year beginning and ending dates
entered in Part I of Form 5500 or by
using the tax year of the business
return filed, if applicable.
Item A. Name and address of filer.
Enter the name and address of the
employer, individual, or other entity who
is liable for the tax.
Include the suite, room, or other unit
numbers after the street number. If the
post office does not deliver mail to the
street address and you have a P.O.
box, show the box number instead of
the street address.
If the entity has a foreign address,
enter the information in the following
order: city or town, province or state,
and country. Follow the country’s
practice for entering the postal code.
Do not abbreviate the country name.
Item B. Filer’s identifying number.
Enter the nine-digit employer
identification number (EIN) assigned to
the plan sponsor/employer, entity, or
individual on whom the tax is imposed
in the appropriate section. The
identifying number of an individual,
other than a sole proprietor with an
EIN, is his or her social security number
(SSN). The identifying number of all
others is their EIN.
Item C. Name of plan. Enter the
formal name of the plan, name of the
plan sponsor, or name of the insurance
company or financial institution of the
direct filing entity (DFE). In the case of
a group insurance arrangement (GIA),
enter the name of the trust or other
entity that holds the insurance contract.
In the case of a master trust investment
account (MTIA), enter the name of the
sponsoring employers.

If the plan covers only the
employees of one employer, enter the
employer’s name or enough information
to identify the plan. This should be the
same name indicated on the Form
5500 series return/report if that form is
required to be filed for the plan.
Item D. Name and address of plan
sponsor. The term “plan sponsor”
means:
1. The employer, for a group health
plan established or maintained by a
single employer;
2. The employee organization, in
the case of a plan of an employee
organization;
3. The association, committee, joint
board of trustees, or other similar group
of representatives of the parties who
establish or maintain the plan, if the
group health plan is established or
maintained jointly by one or more
employers and one or more employee
organizations, or by two or more
employers.

Filer’s signature. To reduce the
possibility of correspondence and
penalties, please sign and date the
form. Also enter a daytime phone
number where you can be reached.
Paid preparer’s signature. Anyone
who prepares your return and does not
charge you should not sign the return.
For example, a regular full-time
employee or your business partner who
prepares the return should not sign.
Generally, anyone who is paid to
prepare the return must sign the return
in the space provided and fill in the
Paid Preparer’s Use Only area. See
section 7701(a)(36)(B) for exceptions.
In addition to signing and completing
the required information, the paid
preparer must give a copy of the
completed return to the taxpayer.
Note. A paid preparer may sign
original or amended returns by rubber
stamp, mechanical device, or computer
software program.

Include the suite, room, or other unit
numbers after the street number. If the
post office does not deliver mail to the
street address and you have a P.O.
box, show the box number instead of
the street address.
If the plan sponsor has a foreign
address, enter the information in the
following order: city or town, province or
state, and country. Follow the country’s
practice for entering the postal code.
Do not abbreviate the country name.
Item E. Plan sponsor’s EIN. Enter
the nine-digit EIN assigned to the plan
sponsor. This should be the same
number used to file the Form 5500
series return/report.
Item F. Plan year ending. “Plan year”
means the calendar or fiscal year on
which the records of the plan are kept.
Enter eight digits in month/date/year
order. This number assists the IRS in
properly identifying the plan and time
period for which the Form 8928 is being
filed. For example, a plan year ended
March 31, 2010, should be shown as
03/31/2010.
Item G. Plan number. Enter the
three-digit number that the employer or
plan administrator assigned to the plan.
This three-digit number is used with the
EIN entered on line B and is used by
the IRS, the Department of Labor, and
the Pension Benefit Guaranty
Corporation as a unique 12-digit
number to identify the plan.

Part I. Tax on Failure To
Satisfy Continuation
Coverage Requirements
Under Section 4980B

!

CAUTION

If the plan number is not
provided, this will cause a delay
in processing your return.

Item H. Unintentional failure. Check
this box if you are claiming a limitation
of the penalty under Parts I or II due to
unintentional failure.

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Complete lines 1 through 6 for each
qualifying event for which one or more
failures to satisfy continuation coverage
requirements occurred during the
reporting period. If multiple qualifying
events occurred with different
noncompliance periods, complete lines
1 through 6 on a separate Part I for
each qualifying event. Then complete a
“summary” Form 8928 with items A
through H and enter the total amount of
the excise tax on line 7 of that summary
form for all qualifying events.
Write “Summary Form” at the top to
indicate that this is a summary form
and attach all copies to it.
For purposes of Part I, a qualifying
event is any of the following.
• Death of the covered employee.
• Termination or reduction of hours of
the covered employee’s employment
(other than by employee gross
misconduct).
• Divorce or legal separation of the
covered employee from the employee’s
spouse.
• Covered employee becoming entitled
to social security benefits.
• Dependent child of the covered
employee ceasing to be a covered child
under the terms of the plan.
• Chapter 11 bankruptcy of the
employer from whose employment the
covered employee retired.
Example 1. On April 2, 2009, the
plan sponsor of a single employer plan
discovered that the plan failed to send
a notice of continuation coverage to an

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employee who experienced a qualifying
event on January 31, 2009. There were
no other violations discovered. The plan
sponsor needs to submit one Form
8928 for the reporting period from
February 1, 2009 through April 2, 2009,
with a noncompliance period of 61
days.
Example 2. On September 16,
2009, the third-party administrator for a
multiemployer plan discovered that the
plan failed to send a notice of
continuation coverage to any of the
employees who experienced a
qualifying event since February 28,
2008. During this period, there were 10
qualifying events. The third-party
administrator needs to complete a
separate Part 1, lines 1 through 6, for
each qualifying event that occurred
during the period from March 1, 2008
through September 16, 2009 and then
complete items A through H and lines 7
through 11 on a “summary” Form 8928.
The third-party administrator will then
submit all copies of Form 8928 with
their summary form.
Note. The excise tax under this part
will not apply if the failure is due to
reasonable cause and not to willful
neglect, and if the failure is corrected
within the 30-day period beginning on
the first date the person liable for the
tax knew, or should have known, that
the failure existed.
Line 1. Calculate the total number of
days of noncompliance within the
reporting period beginning on the date
the failure first occurred and ending on
the earlier of the date the failure is
corrected or, at the latest, a date that is
six months after the last day of the
maximum continuation coverage period
under the qualifying event that led to
the failure.
The noncompliance period may

TIP include portions of more than
one plan year (in the case of an
employee benefit plan) or one tax year
(in the case of an employer or
third-party administrator). In that case,
only the portion of the noncompliance
period falling within that plan year or tax
year would be used to calculate the
excise tax due for that year.
Example 1. Sarah Green
experienced a qualifying event on May
15, 2008. Under the terms of her health
plan, her coverage under the plan
terminated on May 31, 2008, and she
was eligible for continuation coverage
on June 1, 2008. Her plan sponsor
failed to offer continuation coverage
until July 15, 2008. The plan would file
Form 8928 for the 2008 plan year, and
the noncompliance period used to
calculate the excise tax due under Part
I is 45 days.

Example 2. Bruce Smith
experienced a qualifying event on
November 16, 2008. Under the terms of
his health plan, coverage terminated on
the date of the qualifying event, and he
was eligible for continuation coverage
on November 17, 2008. His plan
sponsor failed to offer continuation
coverage until February 1, 2009. In this
case, the plan would file Form 8928 for
the 2008 plan year and the 2009 plan
year. The noncompliance period used
to calculate the excise tax due under
Part I for the 2008 plan year is 45 days,
and the noncompliance period used to
calculate the excise tax due under Part
I for the 2009 plan year is 31 days.
Line 4. The minimum excise tax under
Part I is $2,500 if the failure or failures
were not corrected before the date a
notice of examination of income tax
liability was sent from the IRS. This
applies if the failures occurred before
and during the examination period.
Line 5. The minimum excise tax under
Part I is $15,000 if the failure or failures
are determined to be more than de
minimis.
Line 7. If you had more than one
qualifying event during the reporting
period, complete lines 1 through 6 on a
separate Part I for each qualifying
event and enter the total from line 6
from all copies of Part I on line 7 of your
summary form. See the discussion and
examples 1 and 2 under Part I, above.
$2,000,000 maximum. The
maximum excise tax payable by
third-party administrators, HMOs, and
insurance companies under Part I is
$2,000,000. For those entities, do not
enter more than $2,000,000 on this line
even if the aggregate excise tax owed
for all failures under Part I is more than
$2,000,000.
Lines 8 – 11. If the failures were
unintentional, due to reasonable cause
and not due to willful neglect, check the
box in item H and complete lines 8 and
9 to calculate the maximum excise tax
due under Part I. Then, on line 11,
enter the smallest of lines 7, 9, or 10.
For a single employer plan, enter on
line 8 the aggregate amount paid or
incurred by the employer (or a
predecessor) during the preceding tax
year for its group health plan. For a
multiemployer plan, enter on line 8 the
amount paid by the trust to provide
medical care, directly or through
insurance or reimbursement, during the
tax year.
If an employer who participates

TIP in a multiemployer plan is
required to pay the excise tax
under Part I due to an unintentional
failure, calculate the amount on line 8
as if the plan was a single employer
plan and not a multiemployer plan.

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Waiver of excise tax. The Secretary
may waive part or all of the excise tax
under this part, to the extent that
payment of the tax would be excessive
relative to the failure involved. This only
applies to failures due to cause and not
to willful neglect.
The tax under Part I will not apply to
the following.
• Any failure of a group health plan if
the qualifying event occurred during the
calendar year immediately following a
calendar year during which all
employers maintaining the plan
normally employed fewer than 20
employees on a typical business day.
• Any governmental plan under section
414(d).
• Any church plan under section
414(e).

Part II. Tax on Failure To
Meet Portability, Access,
and Renewability
Requirements Under
Section 4980D
Complete lines 12 through 18 for each
failure to meet certain group health plan
requirements that occurred during the
reporting period. If multiple failures
occurred with different noncompliance
periods, complete lines 12 through 18
on a separate Part II for each failure.
Then complete a “summary” Form 8928
with items A through H and enter the
total amount of the excise tax on line 19
of that summary form for all failures
under Part II.
Write “Summary Form” at the top to
indicate that this is a summary form
and attach all copies to it.
Exception for certain insured small
employer plans. If you are a small
employer who provides health
insurance coverage solely through a
contract with a health insurance issuer,
you will not be liable for the excise tax
under this part for any failure that is
solely the result of the health insurance
coverage offered by the issuer.
“Small employer” is generally
defined as an employer who employed
an average of at least 2 but not more
than 50 employees on business days
during the preceding calendar year, and
who employs at least 2 employees on
the first day of the current plan year.
Note. The excise tax under this part
will not apply if the failure is due to
reasonable cause and not to willful
neglect, and the failure is corrected
within the 30-day period beginning on
the first date the person liable for the
tax knew, or should have known, that
the failure existed. For this purpose, a
failure is treated as corrected if the
failure is retroactively undone to the

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Draft - 1st Circulation 05/18/2009
extent possible and the person to
whom the failure relates is placed in a
financial position which is as good as
such person would have been in had
the failure not occurred.
In the case of a church plan, the
failure must be corrected before the
close of the correction period, as
defined under section 414(e)(4)(C).
Line 12. Calculate the total number of
days of noncompliance within the
reporting period beginning on the date
the failure first occurred and ending on
the date the failure is corrected.
The noncompliance period may

TIP include portions of more than
one plan year (in the case of an
employee benefit plan) or one tax year
(in the case of an employer or
third-party administrator). In that case,
only the portion of the noncompliance
period falling within that plan year or tax
year would be used to calculate the
excise tax due for that year.
Line 16. The minimum excise tax
under Part II is $2,500 if the failure or
failures were not corrected before the
date a notice of examination of income
tax liability was sent from the IRS. This
applies if the failures occurred before
and during the examination period.
Line 17. The minimum excise tax
under Part II is $15,000 if the failure or
failures are determined to be more than
de minimis.
Note. The $15,000 minimum excise
tax for failures that are determined to
be more than de minimis does not
apply to a church plan, as defined in
section 414(e). If your plan meets the
requirements for a church plan, enter
“-0-” on this line.
Line 19. If you had more than one
failure during the reporting period,
complete lines 12 through 18 on a
separate Part II for each qualifying
event and enter the total from line 18
from all copies of Part II on line 19 of
your summary form. See the discussion
and examples 1 and 2 under Part I,
above.
Lines 20 – 23. If the failures were
unintentional, due to reasonable cause
and not due to willful neglect, check the
box in item H and complete lines 20
and 21 to calculate the maximum
excise tax due under Part II. Then, on
line 23, enter the smallest of lines 19,
21, or 22.
For a single employer plan, enter on
line 20 the aggregate amount paid or
incurred by the employer (or a
predecessor) during the preceding tax
year for its group health plan. For a
multiemployer plan, enter on line 20 the
amount paid or incurred by the trust to
provide medical care, directly or

through insurance or reimbursement,
during the tax year.
If an employer who participates
in a multiemployer plan is
CAUTION required to pay the excise tax
under Part II due to an unintentional
failure, calculate the amount on line 20
as if the plan was a single employer
plan and not a multiemployer plan.
Waiver of excise tax. The Secretary
may waive part or all of the excise tax
under this part, to the extent that
payment of the tax would be excessive
relative to the failure involved. This only
applies to failures due to reasonable
cause and not to willful neglect.

!

Part III. Tax on Failure To
Make Comparable
Archer MSA
Contributions Under
Section 4980E
An employer is liable for tax under
section 4980E if he fails to make
available comparable contributions to
the Archer MSAs of all comparable
participating employees for each
coverage period during the calendar
year.
“Comparable contributions” are
contributions which are the same
amount or which are the same
percentage of the annual deductible
limit under the high deductible health
plan covering the employees.
“Comparable participating
employees” are employees who are
eligible individuals covered under any
high deductible health plan of the
employer, and who have the same
category of coverage.
Line 24. Enter the aggregate amount
contributed to employees’ Archer MSAs
for tax years ending with or within the
calendar year.
Waiver of excise tax. The Secretary
may waive part or all of the excise tax
under this part, to the extent that
payment of the tax would be excessive
relative to the failure involved. This only
applies to failures due to reasonable
cause and not to willful neglect.
Controlled group. For purposes of
this part, all persons treated as a single
employer under section 414(b), (c), (m),
or (o) will be treated as one employer.

Part IV. Tax on Failure
To Make Comparable
HSA Contributions
Under Section 4980G
An employer is liable for tax under
section 4980G if he fails to make
available comparable contributions to

-4-

the HSA of all comparable participating
employees for each coverage period
during the calendar year.
Line 26. Enter the aggregate amount
contributed to employees’ health
savings accounts for tax years ending
with or within the calendar year.
Waiver of excise tax. The Secretary
may waive part or all of the excise tax
under this part, to the extent that
payment of the tax would be excessive
relative to the failure involved. This only
applies to failures due to reasonable
cause and not to willful neglect.
Controlled group. For purposes of
this part, all persons treated as a single
employer under section 414(b), (c), (m),
or (o) will be treated as one employer.
Note. Highly compensated employees
are not treated as comparable
participating employees when
determining a failure to make
comparable HSA contributions to a
health savings account of an employee
who is not a highly compensated
employee.

Part V. Tax Due
Make your check or money
order payable to the “United
States Treasury” for the full
amount due. Attach the payment to
your return. Write your name,
identifying number, plan number, and
“Form 8928, Part(s)____” on your
payment.
File at the address shown under
Where To File, earlier.
Privacy Act and Paperwork
Reduction Act Notice. We ask for
the information on this form to carry out
the Internal Revenue laws of the United
States. This form is required to be filed
under sections 4980B, 4980D, 4980E,
and 4980G of the Internal Revenue
Code. Section 6109 requires you to
provide your identifying number. If you
fail to provide this information in a
timely manner, you may be liable for
penalties and interest. Routine uses of
this information include giving it to the
Department of Justice for civil and
criminal litigation, and cities, states, and
the District of Columbia for use in
administering their tax laws. We may
also disclose this information to federal
and state or local agencies to enforce
federal nontax criminal laws and to
combat terrorism.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions
must be retained as long as their
contents may become material in the

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Instructions for Form 8928

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Draft - 1st Circulation 05/18/2009
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by section 6103.
The time needed to complete and
file this form will vary depending on
individual circumstances. The
estimated average time is:
Recordkeeping . . .

10 hrs., 2 min.

Learning about the
law or the form . . .

2 hrs., 55 min.

Preparing and
sending the form
to the IRS . . . . . . .

5 hrs., 36 min.

If you have comments concerning
the accuracy of these time estimates or
suggestions for making this form
simpler, we would be happy to hear
from you. You can write to the Internal
Revenue Service, Tax Products
Coordinating Committee,

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SE:W:CAR:MP:T:T:SP, IR-6526, 1111
Constitution Ave. NW, Washington, DC
20224. Do not send this form to this
address. Instead, see Where To File on
page 1.