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July 16, 2014
Employers who sponsor self-funded medical plans must report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fees no later than July 31, 2014. Health insurance carriers/insurers will pay the fee directly in the case of fully-insured plans.
PCORI fees apply to plan years ending after Sept 30, 2012 and before Oct 1, 2019. The fee is paid using quarterly excise tax Form 720 and must be paid no later than July 31 of the year following the last day of the plan year. Self-funded plans with a plan year beginning in a month other than November, December or January are likely paying the fee for the first time this year.
The PCORI fee generally applies to all group health plans, but not to excepted benefits. The IRS published a helpful chart that describes the different types of plans subject to the fee at: opens in a new window http://www.irs.gov/uac/Application-of-the-Patient-Centered-Outcomes-Research-Trust-Fund-Fee-to-Common-Types-of-Health-Coverage-or-Arrangements
Amount of Fee
Payment amounts due in 2014 differ based on the employer’s plan year.
For future years, the annual fee will be increased based on the percentage increase in the projected per capita amount of National Health Expenditures (as published by the IRS).
Calculating the Average Covered Lives
There are 3 methods available to determine the average count of lives to base the fee on:
Important notes for counting covered lives:
Additional details on calculating amount of the fee due were described in our earlier issue brief on this topic.
As always, should you have any questions, please contact your
opens in a new windowParker, Smith & Feek Benefits Team.
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