Under the Affordable Care Act, many employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs), are subject to what is known as the PCORI Fees.
Affected employers must typically report and pay the required fees via IRS Form 720, Quarterly Federal Excise Tax Return, no later than July 31st of the year following the last day of the plan year to which a fee applies. However, because July 31st, 2016 is a Sunday, Form 720 and the required fees are due by Monday, August 1st, 2016.
Calculating and Paying the Fee
Using Part II, Number 133 of Form 720, issuers and plan sponsors will be required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year, as follows:
- $2.08 for plan years ending on or after Oct. 1, 2014, and before Oct. 1, 2015
- $2.17 for plan years ending on or after Oct. 1, 2015, and before Oct. 1, 2016
- For plan years ending on or after Oct. 1, 2016, and before Oct. 1, 2019, the rate will increase for inflation
The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.
Support for Clients of CBG Benefits
Your Account Management team at CBG Benefits will be reaching out to you to ensure that you understand and are prepared to meet this compliance requirement. In addition, we encourage you to visit the CBGconnect portal and download the “Health Care Reform: Reporting and Paying the PCORI Fees” bulletin.
If you have any questions in the meantime, please contact our team at 781-759-1222.