Patient-Centered Outcomes Research Institute (PCORI) Fee

The Affordable Care Act imposes a Patient-Centered Outcomes Research Institute (PCORI) fee on health plans with policy years ending after September 30, 2012 and before October 1, 2019. The fee will be paid by health insurers of fully-insured plans and employer plan sponsors of self-insured plans and is assessed yearly based on the average number of covered lives (both subscribers and dependents) on the medical plan during the plan year.

For the 1st year of reporting, plan years ending after September 30, 2012 and before October 1, 2013, the fee is $1.00 per average number of covered lives during the plan year. For the 2nd year of reporting, plan years ending after September 30, 2013 and before October 1, 2014, the fee is increased to $2.00. For the 3rd year of reporting, plan years ending after September 30, 2014 and before October 1, 2015, the fee is increased further to $2.08.

Employer plan sponsors of self-insured plans must report and pay the PCORI fee using the IRS Quarterly Excise Tax Form 720 by July 31 of the year following the last day of the plan year. Although IRS Form 720 is a Quarterly Excise Tax Form, employer plan sponsors who are using it to file only for purposes of the PCORI fee will only need to file the form in the 2nd quarter and do not need to file for the 1st, 3rd or 4th quarter. No action is required of employer plan sponsors of fully-insured plans as their health insurer will file and pay the PCORI fee on their behalf.

Group Alternatives will provide all client plan sponsors of self-insured plans with the number of covered lives necessary for submitting the Quarterly Excise Tax Form 720 for each reporting year.

© 2015 | Group Alternatives, Inc.

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