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 or a retiree only plan, the fee will apply.
How do you determine the number of covered lives?
- Contact BeneFLEX for your Average Covered Lives Report. 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?
This year, the fee will be $2.00 per covered life. In subsequent years, it will be indexed to national health expenditures. The fee will end in 2019.
How do you file and pay the fee?
You must file the Quarterly Federal Excise Tax Return Form 720 by July 31, 2014. To file the form, go to http://www.irs.gov/pub/irs-pdf/i720.pdf, then go to Part II (page 8) of the form, enter the number of employees covered by your HRA in Table IRS No. 133, multiply that number by $2 per person, and then follow IRS guidelines for submission. For additional information, review IRS Notice – PCORI Fees
For questions regarding the PCORI Fee or to request your Average Covered Lives Report, contact us at email@example.com or Customer Service at (800) 631-3539.
The BeneFLEX Team