What is the PCORI Fee?
Under the Affordable Care Act, medical insurance plans and Health Reimbursement Accounts (HRA) are subject to Patient-Centered Outcomes Research Trust Fund Institute (PCORI) fees. These fees will fund comparative effectiveness research. The research will evaluate and compare health outcomes for effectiveness, risks, and benefits of two or more medical treatments and/or services.
Who Has to File?
For fully-insured medical plans, the fee will be paid by the carrier and is built into premium pricing. For employers with self-funded medical plans and/or Health Reimbursement Accounts (HRAs), the employer is responsible for filing a federal excise tax return via IRS Form 720 and paying the fee directly to the IRS. For your plan year that ended in 2014, this filing and payment is due by July 31, 2015.
How is the Fee Determined?
The fee is $2.00 per plan participant if your plan year ended by September 30, 2014. If your plan year ended between October 1, 2014 and December 31, 2014, the fee is $2.08 per participant. The filing is completed by July 1st of the following year of when the plan year ended. You are only required to file Form 720 once a year; it is not required for other quarters of the year.
For employers who have a self-funded HRA partnered with a fully insured medical plan, the HRA is subject to only the participant’s account and is not required to count spouses or dependents (unlike the fully-insured medical plan which counts both the employee and their dependents).
If you have any specific questions about filing Form 720, please consult with your tax advisor. If you have general questions about the PCORI fees or how they interface with your benefit plans, please contact your dedicated Paypro Benefits Specialist, or your benefits broker if you are not a Paypro Benefits client.