2014 PCORI Fee is Due July 31st…
Riddled throughout the Affordable Care Act (ACA) / Obamacare were fees for this, and fees for that. Some significant – some not so significant. But all of which could be significant if you fail to pay them and pay them timely.
One of the not-so-significant in size or dollar amount is the Patient Centered Outcomes Research Institute Fee that most group accident and health, or major medical plans are required to pay.
What is the PCORI Fee?
The PCORI fee was established and included in ACA to help fund the research efforts of the Patient Centered Outcomes Research Institute ultimately intended to assist patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute will compile and distribute comparative clinical effectiveness research findings What exactly that means for most of us will likely never be known.
Who has to pay the PCORI Fee?
Generally speaking, any group health plan that is considered a “specified health plan” is subject to the fee. For the most part, fully-insured carriers are paying the fee on behalf of their insured contracts. Self-funded plans, however, must ensure that they include the annual PCORI fee in their 2nd Quarter Excise Tax Filing (due July 31st) – and use Form 720 accordingly.
How much is the PCORI Fee?
For 2014, the fee increased to $2 times the average number of participants in the plan. There are a few different ways self-insured plans may calculate the number of participants, and they include: the actual count method, the snapshot method, or the Form 5500 method. Final regulations explain the calculation methods in greater detail. Click here for more information.
What are some examples of specified health plans?
The IRS has published a chart here to outline plans that would be subject to the PCORI fee. The most frequently overlooked plan is a self-funded Health Reimbursement Arrangement (HRA) that many employers administer in-house. Excepted benefits are those not generally considered health coverage – or limited scope benefits (i.e. AFLAC Accident plan). For further info on excepted benefits, refer to the Federal Register here.