ACA Fee Highlights and 2018 Updates

The IRS and the Department of Health and Human Services have issued final regulations that provide details on several fees that will be due as part of the Patient Protection and Affordable Care Act (ACA). Self-funded plans will calculate and pay these fees directly. Insurers will calculate and pay the fees due on insured policies, although insured plans should expect these fees to be passed along.

Both the Patient-Centered Outcomes Research Institute (PCORI) fee and the Transitional Reinsurance Fee (TRF) are temporary and are based on covered lives – that is, both employees and retirees and their covered spouses and children generally must be counted. The basic methods a plan may use to count members are the same under the two fees (although a plan may use one method for one fee and a different method for the other fee if it prefers). However, because the PCORI fee is based on a plan year, the PCORI count looks at the entire plan year. (Note that although PCORI is based on the plan year, the reporting and fee due date is always July 31.) In contrast, the TRF is based on a calendar year, even for non-calendar year plans. TRF reporting of covered lives will be due November 15. The majority of the fee will be due early in the next January, with the balance due in the following fourth quarter. To meet the November 15 reporting date, for TRF purposes, covered lives will only be counted for the first nine months of the calendar year.

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.