SECTION 5. APPLICATION OF

SPECIAL RULE BY ADJUSTMENT TO 2015 FEE

The IRS will apply the special rule for both the 2014 and 2015 fee years by adjusting the 2015 fee rather than by issuing refunds. ² The IRS will first calculate the 2015 fee for all covered entities as described in § 57.4. Second, for a covered entity with premiums for expatriate health plans included in total direct premiums written reported for the 2015 fee year, the IRS will adjust the covered entity’s 2015 fee by (a) multiplying its 2015 fee amount by a fraction, the numerator of which is the amount of its expatriate health plan premiums taken into account that is included in net premiums written taken into account for the 2015 fee year and the denominator of which is the covered entity’s total net premiums written taken into account for the 2015 fee year; and (b) subtracting this amount from the 2015 fee. Third, for a covered entity with net premiums written for expatriate health plans

included in total direct premiums written reported for the 2014 fee year, the IRS will further adjust the entity’s 2015 fee by (a) multiplying its 2014 fee amount by a fraction, the numerator of which is the amount of its expatriate health plan premiums taken into account that is included in net premiums written taken into account for the 2014 fee year and not previously excluded in determining the 2014 fee and the denominator of which is the covered entity’s total net premiums written taken into account for the 2014 fee year; and (b) subtracting this amount from the 2015 fee.