- Posted by Scott Wham
- On May 25, 2017
The Patient-Centered Outcomes Research Trust Fund fee is a fee on health insurers’ policies and plan sponsors of self-insured health plans (including level-funded health plans) that helps to fund the Patient-Centered Outcomes Research Institute (PCORI). For an overview of health plans that are subject to the PCORI fee, please click here.
When is the PCORI Fee due?
PCORI fees are due for plan years ending in 2016 (i.e. a January 1 plan year ended December 31, 2016, a February 1 plan year ended January 31, 2016, etc.) July 31, 2017 from health insurers and the plan sponsors of self-insured plans. The fee is paid annually using IRS Form 720, Quarterly Federal Excise Tax Return. The payment, paid through the Electronic Federal Tax Payment System (EFTPS), should be applied to the second quarter (in EFTPS, select Q2 for the Quarter under Tax Period on the “Business Tax Payment” page).
How are PCORI Fees calculated?
The PCORI fee is calculated based on the average number of lives covered under the policy or plan. For an overview of how to calculate the PCORI Fees for self-insured health plans, please click here (see section titled “Applicable Self-Insured Health Plans”).
How much are PCORI Fees?
For plan years ending between January 1, 2016 and October 1, 2016, the fee will be $2.17 multiplied by the average number of covered lives. For plan years ending on or after October 1, 2016 through December 31, 2016, the fee will be $2.26 multiplied by the average number of covered lives. To review the IRS’ PCORI Fee schedule, please click here.
SPECIAL RULES FOR HRAs and FSAs
If an employer sponsors a fully-insured medical plan and a self-funded plan such as a Health Reimbursement Account (HRA), a Medical Expense Reimbursement Account (MERP), or, in rare instances, a Health Flexible Spending Account (FSA), the employer may be required to pay separate PCORI fees for the self-insured aspect of the fully-insured plan. Note, however, that to calculate the PCORI fee for HRA accounts, only covered employees are counted, not dependents and spouses.
If you have questions regarding the PCORI Fee, please contact your Kistler Tiffany Benefits’ Employee Benefits Consultant. You can also listen to a recording on the PCORI fee by our Director of Compliance Services’, Scott Wham, J.D., by clicking here.