PCORI fee due by July 31st

The IRS has released the 2014 Form 720 that plan sponsors of self-insured group health plans will use to report and pay the Patient Centered Outcomes Research Institute (PCORI) fee. The fee is due by July 31, 2014 for plan years ending in 2013.

The Affordable Care Act (ACA) imposes a fee on health insurers and plan sponsors of self-insured group health plans to help fund the  Patient Centered Outcomes Research Institute. PCORI is responsible for conducting research to evaluate and compare the health outcomes and clinical effectiveness, risks, and benefits of medical treatments, services, procedures, and drugs.

The PCORI fee is assessed for plan years ending after September 30, 2012. The initial fee is $1 times the average number of covered lives for the first plan year ending before October 1, 2013 and $2 per covered life for the plan year ending after October 1, 2013 and before October 1, 2014. Fees for subsequent years are subject to indexing. The PCORI fee will not be assessed for plan years ending after September 30, 2019, which means that for a calendar year plan, the last plan year for assessment is the 2018 calendar year.

Plan sponsors must pay the PCORI fee by July 31 of the calendar year immediately following the last day of that plan year. All plan sponsors of self-insured group health plans will pay the fee in 2014, but the amount of the fee varies depending on the plan year.

• Plan years ending before October 1, 2013- $1 per covered life
• Plan years ending October 1, 2013 - September 30, 2014- $2 per covered life
• Plan years ending October 1, 2014  and beyond - to be determined based on the increases in the projected per capita amount of National Health Expenditures

The IRS has released the 2014 Form 720 with instructions for plan sponsors to use to report and pay the PCORI fee. Although the Form 720 is a quarterly federal excise tax return, if the Form 720 is filled only to report the PCORI fee, no filing is required in other quarters unless other fees or taxes have to be reported. 

Please contact our office for information on the Affordable Care Act (ACA) and how it affects your business. 

Reminder: PCORI fee due by July 31, 2013

If your company offered either a Health Reimbursement Account (HRA) or Medical Expense Reimbursement Plan (MERP) as part of your employee benefits package in 2012, you must report and pay the PCORI fee for your 2012 plan year no later than July 31, 2013. Please note that the penalty for not filing can be as high as $10,000 per month.

You must use the IRS Form 720 to report and pay the PCORI fee.

If you used a third party administrator to handle the administration of your HRA or MERP plan, they should have provided you with the necessary information to complete Form 720 as they are not permitted to file this with the IRS on your behalf.

Please let us know if you have any questions.