If you are an employer that self-funds the company’s medical insurance plan(s), be aware that the company is responsible for submitting the Patient Centered Outcomes Research Institute (“PCORI”) fee to the IRS by July 31, 2019, for plans that ended in 2018.
PCORI, an entity created by the Affordable Care Act, is responsible for compiling and distributing comparative clinical effectiveness research findings. The fees collected by plans are what fund the Institute.
PCORI fees apply to plan sponsors of self-insured medical plans that provide health or accident benefits primarily to individuals living in the United States.
The PCORI fee applies to specified health insurance policies with policy years ending after September 30, 2012, and before October 1, 2019, and applicable self-insured health plans with plan years ending after September 30, 2012, and before October 1, 2019. The PCORI fee will not be assessed for plan years ending after September 30, 2019.
The plans subject to PCORI fees (sometimes referred as Comparative Effectiveness Research Fees, or CERF for short) include plan sponsors of self-insured medical plans that provide health or accident benefits primarily to individuals living in the United States. Plans such as major medical (including retiree-only and COBRA), level-funded plans, Health Reimbursement Accounts (HRAs) that are not integrated with an underlying self-insured medical plan, as well as Minimum Essential Coverage (MEC) plans that provide more than excepted benefits. Note, an HRA is not required to pay the fee for individuals who are covered under both an HRA and a self-insured major medical group plan with the same plan year. Most FSA health plans and Employee Assistance Programs (EAP) are not subject to the fee so long as they do not provide significant benefits for medical care or treatment.
Sponsors of self-funded plans must file the second quarter Form 720 annually, by July 31st, and report and pay the PCORI fee for the prior plan year. The fee is calculated by multiplying $2.45 by the average numbers of lives covered under the plan.
For a complete understanding of the fee and how to file, visit the following IRS web pages: https://www.irs.gov/affordable-care-act/patient-centered-outcomes-research-trust-fund-fee-questions-and-answers or https://www.irs.gov/forms-pubs/about-form-720-x
Form 720X is available on the IRS web site by visiting: https://www.irs.gov/pub/irs-pdf/f720.pdf