As you know, the Patient Protection and Affordable Care Act (“ACA”) amended the Internal Revenue Code (“IRC”) to add Sections 4375 and 4376. These provisions require payment of the Patient Centered Outcomes Research Institute (“PCORI”) fees by the issuers of health insurance policies (Section 4375) and the plan sponsors of self-insured plans (Section 4376). The PCORI fee is calculated based on the number of covered lives under the plan in a given plan year.
For plan years ending on or after January 1, 2017 through September 30, 2017, the fee has been increased to $2.26 per covered life. For plan years ending on or after October 1, 2017 through December 31, 2017, including calendar year plans, the fee has been increased to $2.39 per covered life.
Plan sponsors must pay the PCORI fee on or before July 31 of the calendar year immediately following the calendar year in which the plan year ends.
Under the ACA, the PCORI fee will not be assessed for plan years ending after September 30, 2019.
What Does This Mean For You? Employers who have self-insured health plans should be prepared to file IRS Form 720 and remit the applicable PCORI fee on or before July 31, 2018 for the 2017 plan year. Employers with fully-insured health plans do not have to file Form 720 or remit the PCORI fee because the plan sponsor is required to do so. However, if an employer is a plan sponsor of a Health Reimbursement Arrangement (“HRA”), the employer will be required to file IRS Form 720 and remit the applicable PCORI fee on or before July 31, 2018 based on enrollment in the employer-sponsored HRA.
If you have any questions about this or any other employment or labor law issue, please contact Grace Nguyen Bond at 717-509-7226 or firstname.lastname@example.org, or Whitney Rahman at 717-509-7237 or email@example.com.