An important compliance deadline is approaching! PCORI fees are due to the IRS by July 31 from health insurers and the plan sponsors of self-insured plans.
The Patient-Centered Outcomes Research Institute (PCORI) fee helps fund research intended to assist patients, clinicians and policymakers in making informed health decisions by advancing the quality and relevance of evidence based medicine.
Under the ACA, the PCORI fee applies to grandfathered, medical, pharmacy, retiree-only, and any accident or health insurance coverage (including a policy under a group health benefit plan) issued to individuals residing in the United States.
Calculating and Paying the Fee
The amount of the fee, in effect from 2012 to 2019, is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. The fee for 2014-2015 plan years will be $2.08 per covered life on the plan, including dependents in the calculation. Payment must be submitted to the IRS using Form 720 by July 31 of the calendar year immediately following the last day of the plan year.
If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. For employers sponsoring HRAs and other self-insured plans the employer/plan sponsor must file the Form 720 and pay the fee to the IRS directly. It is important to note that for self-funded plans and stand-alone HRA plans, third-party administrators are prohibited under health reform law from remitting the fee for you.
As such, we wanted to provide you with information to assist you with what you will need to meet this requirement. This link provides a simple chart of Filing Due Dates and Applicable Rates for your review.
The 2015 Form 720 and instructions are available on the IRS website. For your convenience, links to the form and corresponding instructions are listed below:
- IRS Form 720: http://www.irs.gov/pub/irs-pdf/f720.pdf
- Instructions for Form 720: http://www.irs.gov/pub/irs-pdf/i720.pdf
Please do not hesitate to contact us with any questions on this fee.