The July 31st deadline for health care insurers
and sponsors of self-insured health plans to pay the annual PCORI fee is only a
few weeks away. Patient-Centered Outcomes Research Institute (PCORI), is a nonprofit, nongovernmental organization located in Washington,
DC. Congress authorized the establishment of PCORI in the Patient Protection
and Affordable Care Act of 2010. PCORI is funded in part by fees paid by
certain health insurers and applicable sponsors of self-insured health plans,
including Health Reimbursement Arrangements.
The fees are payable in connection with all HRAs for
policy/plan years ending October 1, 2012, but stop applying for policy/plan
years ending after September 30, 2019. The fee is due for filing with
payment by July 31, 2015 for all plan years ending in 2014. Fees are to
be reported and paid once a year using IRS Form 720 (even though IRS Form
720 is a Quarterly Federal Excise Tax Return). A copy of the current
IRS Form 720 can be found at http://www.irs.gov/pub/irs-pdf/f720.pdf,
and the appropriate fee can be reported in Part II.
plan sponsor of an HRA is the employer. The fee imposed on a plan sponsor of an
HRA is based on the average number of lives (employee participants)
covered under the plan, which means spouses, dependents, and any other
beneficiaries can be ignored. Not all HRA plan sponsors are required to
pay the fee per IRS and Department of Labor guidance issued in September 2013.
- Section 105 HRA (with only 1 employee) - Business owners with one employee that have an HRA in place no longer have to pay this fee.
- Section 105 HRA (with 2 or more employees) & Integrated HRA - Business owners with two or more employees that have an HRA in place are still required to pay the fee by July 31, 2015.
- Excepted Benefits HRA - Business owners with an Excepted Benefits HRA in place are not subject to the fee since it provides only excepted benefits.
The fee for a plan year ending on or after October 1, 2014,
but before October 1, 2015, is $2.08 ($2.00 for a plan year ending on or after
October 1, 2013, but before October 1, 2014), multiplied by the average number
of lives covered under the plan for that plan year.
For complete instructions on paying and submitting the PCORI
fee, please visit http://www.irs.gov/pub/irs-pdf/i720.pdf. If
you have questions regarding this or any other aspects of the ACA as it relates
to tax advantaged plans, or maybe you are interested in learning how one of our
tax saving benefit plans can work for you, simply contact us today!
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