I want to provide you with a reminder about the upcoming PCORI (Patient-Centered Outcomes Research Trust Fund) Fee deadline, which is a requirement under the Affordable Care Act. It is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund PCORI, which is designed to “assist, through research, patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine”.
To help your company understand and meet its requirements, here is a brief summary of the rules regarding this fee:
- When is the fee due:
The fee must be paid by July 31, 2015
- Who must pay the fee:
Generally, the following employers may need to pay the fee directly:
- Employers that sponsor a self-insured health plan
- Employers that have a fully-insured health plan with a Health Reimbursement Arrangement (HRA)
Please review the full list provided by the IRS to learn who is responsible for paying this fee across a variety of situations.
- How to calculate the fee:
The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year.
- The fee for policy and plan years ending on or after October 1, 2014, but before October 1, 2015, is $2.08
- The fee for policy and plan years ending on or after October 1, 2013, but on or before September 30, 2014 is $2.00
Determining the lives covered:
The fee is based on the number of covered lives — employees along with their covered dependent spouses and children are all counted. However, only the employee needs to be counted for an HRA — dependents covered by these accounts can be excluded.
Please note: Upon request, the vendor for your HRA or self-insured health plan should be able to provide a report that details your average covered lives for the plan year.
- How to pay the fee:
Fees are reported and paid using IRS Form 720, Quarterly Federal Excise Tax Return.The IRS has also provided additional resources to help employers calculate and pay the fee. This includes an instructions document and a Questions and Answers document.
I hope that you find this brief compliance update helpful. If you have any additional questions, please contact the CBG Benefits team at 781-759-1222 or via email at info@CBGBenefits.com.