PCORI Fee Reminder

PCORI Fee Reminder

As a result of the Affordable Care Act (ACA), health plan sponsors and issuers of individual and group health insurance policies are required to pay a fee to help fund the Patient-Centered Outcomes Research Institute (PCORI). This is a private, non-profit corporation that will collect, analyze, and report on comparative clinical effectiveness research findings leading to lower healthcare costs resulting in lower premiums.

Which plans are affected?
If you offer a Health Reimbursement Arrangement (HRA), integrated with a fully insured plan, retiree only plan and qualified small employer health reimbursement arrangements (QSEHRA) the fee will apply.

How do you determine the number of covered lives?
BeneFLEX will email you a copy of the Average Covered Lives Report  during the week of June 4, 2018. If you offer an HRA with a fully insured health plan, you can treat each employee’s HRA as covering a single life. You do not have to include the spouse or dependents.

Who is responsible for paying the fee?
Self-funded plans including HRAs – The ACA states the employer pays the fee. The ACA does not intend to develop a process to allow third party TPAs to file and pay the fee on behalf of the self-funded employer groups. This is the ACA’s approach to funding the Patient-Centered Outcomes Research Institute.

How much is the fee?

HRA Plan Year Ending in 2017 Fee for July 31, 2018 Payment
Plan year ending on or after October 1, 2017 through December 31, 2017; including calendar-year plans   $2.39
Plan year ending on or after January 1, 2017 through September 30, 2017  $2.26

In subsequent years, it will be indexed to national health expenditures. The PCORI Fee is effective for policy and plan years ending on or after October 1, 2012 and before October 1, 2019.

How do you file and pay the fee?
You must file the Quarterly Federal Excise Tax Return Form 720 by July 31, 2018. To file the form, go to https://www.irs.gov/pub/irs-pdf/f720.pdf then go to Part II on the form, enter the number of employees covered by your HRA in Table IRS No. 133, multiply that number by per person fee and then follow IRS guidelines for submission. For additional information go to https://www.irs.gov/uac/newsroom/patient-centered-outcomes-research-institute-fee or IRS PCORI Fee Questions & Answers.

Contact Us
For questions regarding the PCORI Fee contact us at info@beneflexhr.com or Customer Service at (314) 909-6979.

The information provided in this document does not constitute legal, regulatory (including without limitation ERISA), insurance, tax or financial advice. The information provided herein is not intended to be a substitute for professional advice and is designed to provide general information only. Please seek independent advice before making any decisions or determinations regarding the matters covered in this document.