PCORI Fee Filing and Payment Deadline is July 31, 2017

The Affordable Care Act (ACA) imposes a fee on health insurance issuers and plan sponsors of self-insured health plans to help fund the Patient-Centered Outcomes Research Institute. The fee, called the Patient-Centered Outcomes Research Institute (PCORI) fee, is calculated based on the average number of lives covered under the policy or plan.

The fee applies to policy or plan years ending on or after October 1, 2012, and before October 1, 2019. The PCORI fee is filed using IRS Form 720, Quarterly Federal Excise Tax Return. Although Form 720 is a quarterly return, for PCORI fees, Form 720 must be filed annually only, by July 31 of each year.

  • The fee for plan years ending on or after October 1, 2015, but before October 1, 2016, is $2.17, multiplied by the average number of lives covered under the plan.
  • The fee for plan years ending on or after October 1, 2016, but before October 1, 2017, is $2.26, multiplied by the average number of lives covered under the plan.
  • The average number of covered lives or participants is based on the number of employees, spouses and dependents that are covered by the plan.

Special rule for coverage under multiple applicable self-insured health plans

Generally, separate fees apply for lives covered by each specified health insurance policy or applicable self-insured health plan. However, two or more applicable self-insured health plans may be combined and treated as a single applicable self-insured health plan for purposes of calculating the PCORI fee if the plans have the same plan sponsor and the same plan year.

For example, if amounts in an HRA may be used to pay deductibles and copays under a specified health insurance policy, the HRA and the insurance policy would be subject to separate PCORI fees. However, an HRA that may be used to pay deductibles and copays under an applicable self-insured health plan is not subject to a separate fee if both the HRA and the applicable self-insured health plan have the same plan sponsor and the same plan year.

There is no similar rule for lives covered by more than one insurance policy subject to the PCORI fee.

Special counting rule for HRAs and FSAs

Plan sponsors are permitted to assume one covered life for each employee with an HRA, even if the HRA can reimburse expenses of the employee’s family members. Similarly, plan sponsors are permitted to assume one covered life for each employee with an FSA.

Links and Resources

Please see the following IRS resources for more information on the ACA’s PCORI fees:

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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.