Section 6301 of the Affordable Care Act (ACA) imposes a new fee on plan sponsors. The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI). The institute will assist, through research, 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.
The information below is focused on Plan Sponsors of self-insured health plans.
The PCORI fee applies to self-insured health plans with plan years ending after September. 30, 2012, and before Oct. 1, 2019. The fee is due on July 31 of the calendar year following the last day of the plan year. (See chart on last page.)
The amount of the PCORI fee is equal to the average number of lives covered during the plan year multiplied by the applicable dollar amount for the year.
• For plan years ending after Sept. 30, 2012, and before Oct. 1, 2013, the applicable dollar amount is $1.
• For plan years ending after Sept. 30, 2013, and before Oct.1, 2014, the applicable dollar amount is $2.
• For plan years ending after Sept. 30, 2014, and before Oct.1, 2015, the applicable dollar amount is $2.08.
• For plan years beginning on or after Oct. 1, 2015, and before Oct. 1, 2019, the applicable dollar amount is further adjusted to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services.
The PCORI fee is based on the average number of lives covered under the plan for the plan year being reported.
The final regulations require plan sponsors of applicable health plans to use one of three alternative methods — the actual count method, the snapshot method or the Form 5500 method — to determine the average number of lives covered under the applicable self-insured health plan for a plan year.
Generally, all individuals who are covered during the plan year (including COBRA participants) must be counted in computing the average number of lives covered for that year. Thus, for example, an applicable self-insured health plan must count an employee and his dependent child as two separate covered lives unless the plan is a health reimbursement arrangement (HRA) or flexible spending arrangement (FSA). (See below for special rules for HRAs.)
Plan sponsors of applicable self-insured health plans will file annually Form 720, Quarterly Federal Excise Tax Return, to report and pay the PCORI fee. The Form 720 will be due on July 31 of the calendar year following the last day of the plan year. Electronic filing is available but not required. Payment will be due at the time the Form 720 is due.
Since this is an Excise Tax, Regional Care, Inc. cannot report or pay this fee on behalf of our clients. This fee must be reported and paid by the Plan Sponsor (i.e. the Employer).
The PCORI fee does not apply to exempt governmental programs, including Medicare, Medicaid, Children’s Health Insurance Program (CHIP) and any program established by federal law for providing medical care (other than through insurance policies) to members of the Armed Forces, veterans and members of Indian tribes (as defined in section 4(d) of the Indian Health Care Improvement Act).
Also, health insurance policies and self-insured plans that provide only excepted benefits, such as plans that offer benefits limited to vision or dental benefits and most flexible spending arrangements (FSAs), are not subject to the PCORI fee.
Further, health insurance policies or self-insured plans that are limited to employee assistance programs, disease management programs or wellness programs are not subject to the PCORI fee if these programs do not provide significant benefits in the nature of medical care or treatment.
The PCORI fee applies only to policies and plans that cover individuals residing in the United States. Thus, the PCORI fee does not apply to policies and plans that are designed specifically to cover employees who are working and residing outside the United States.
HRA plans are considered a self-funded health plan maintained by the Plan Sponsor and as such are required to pay the PCOR fee. The timing of when the fee is due and the amount of the fee is the same as above however, the calculations are different.
For stand-alone HRA plans that do not just reimburse dental or vision expenses, the Plan Sponsor may treat each participant’s HRA as covering a single life. This means that even if the HRA covers expenses for dependents, those dependents are not counted when totaling the average number of covered lives under the plan. For stand-alone dental or visions only HRA’s the fee doesn’t apply.
For HRAs that are integrated with another self-funded health plan, the reporting and payment under the self-funded health plan will satisfy the requirements of the HRA. Both plans are treated as one plan.
For HRAs that are integrated with a fully insured plan, each plan must be counted separately. However, the Plan Sponsor may treat each participant’s HRA as covering a single life. This means that even if the HRA covers expenses for dependents, those dependents are not counted when totaling the average number of covered lives under the plan.
For questions on any of this or assistance in calculating the fee, please contact us your Account Manager.
Plan Year (2011 New & Renewal Dates) | Fee per average covered life | When fee must be paid |
November 1, 2011 through October 31, 2012 | $1 | July 31, 2013 |
December 1, 2011 through November 30, 2012 | $1 | July 31, 2013 |
Plan Year (2012 New & Renewal Dates) | Fee per average covered life | When fee must be paid |
January 1, 2012 through December 31, 2012 | $1 | July 31, 2013 |
February 1, 2012 through January 31, 2013 | $1 | July 31, 2014 |
March 1, 2012 through February 28, 2013 | $1 | July 31, 2014 |
April 1, 2012 through March 31, 2013 | $1 | July 31, 2014 |
May 1, 2012 through April 30, 2013 | $1 | July 31, 2014 |
June 1, 2012 through May 31, 2013 | $1 | July 31, 2014 |
July 1, 2012 through June 30, 2013 | $1 | July 31, 2014 |
August 1, 2012 through July 31, 2013 | $1 | July 31, 2014 |
September 1, 2012 through August 31, 2013 | $1 | July 31, 2014 |
October 1, 2012 through September 30, 2013 | $1 | July 31, 2014 |
November 1, 2012 through October 31, 2013 | $2 | July 31, 2014 |
December 1, 2012 through November 31, 2013 | $2 | July 31, 2014 |
Plan Year (2013 New & Renewal Dates) | Fee per average covered life | When fee must be paid |
January 1, 2013 through December 31, 2013 | $2 | July 31, 2014 |
February 1, 2013 through January 31, 2014 | $2 | July 31, 2015 |
March 1, 2013 through February 28, 2014 | $2 | July 31, 2015 |
April 1, 2013 through March 31, 2014 | $2 | July 31, 2015 |
May 1, 2013 through April 30, 2014 | $2 | July 31, 2015 |
June 1, 2013 through May 31, 2014 | $2 | July 31, 2015 |
July 1, 2013 through June 30, 2014 | $2 | July 31, 2015 |
August 1, 2013 through July 31, 2014 | $2 | July 31, 2015 |
September 1, 2013 through August 31, 2014 | $2 | July 31, 2015 |
October 1, 2013 through September 30, 2014 | $2 | July 31, 2015 |
November 1, 2013 through October 31, 2014 | $2.08 | July 31, 2015 |
December 1, 2013 through November 31, 2014 | $2.08 | July 31, 2015 |
Plan Year (2014 New & Renewal Dates) | Fee per average covered life | When fee must be paid |
January 1, 2014 through December 31, 2014 | $2.08 | July 31, 2015 |
February 1, 2014 through January 31, 2015 | $2.08 | July 31, 2016 |
March 1, 2014 through February 28, 2015 | $2.08 | July 31, 2016 |
April 1, 2014 through March 31, 2015 | $2.08 | July 31, 2016 |
May 1, 2014 through April 30, 2015 | $2.08 | July 31, 2016 |
June 1, 2014 through May 31, 2015 | $2.08 | July 31, 2016 |
July 1, 2014 through June 30, 2015 | $2.08 | July 31, 2016 |
August 1, 2014 through July 31, 2015 | $2.08 | July 31, 2016 |
September 1, 2014 through August 31, 2015 | $2.08 | July 31, 2016 |
October 1, 2014 through September 30, 2015 | $2.08 | July 31, 2016 |
November 1, 2014 through October 31, 2015 | To be announced | July 31, 2016 |
December 1, 2014 through November 31, 2015 | To be announced | July 31, 2016 |