What is the Patient-Centered Outcomes Research Trust Fund fee?
PCORI, or Patient-Centered Outcomes Research Institute, was created by the Patient Protection Affordable Care Act (ObamaCare) to support clinical effectiveness and is funded in part by fees paid by health insurance carriers and health plan sponsors such as employers who provide an HRA.
Who Pays the PCORI Fee?
For HRAs, the Plan Sponsor (the employer) must pay a fee for each covered employee. This fee is due July 31st of the calendar year following the end of the plan year being reported. The fee is remitted using IRS Form 720, the Quarterly Federal Excise Tax Return. To see the fee schedule, please click here
Each applicable employer will have to make a check payable to the “United States Treasury Department” and mail to the below address.
Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999-0009
How much is the fee?
For plan years:
- Ending on or after October 1, 2014 and before October 1, 2015: $2.08 per covered life.
- Ending on or after October 1, 2015 and before October 1, 2016: $2.17 per covered life.
- Ending on or after October 1, 2016 and before October 1, 2017: $2.26 per covered life.
- For plans ending after 12/31/16, you will not owe the PCORI fee until July 2018
Below is the list of plan years that owe the PCORI fee by July 31st, 2017
|Plan Years Ending in 2016||Fee per Covered Life Due by 7/31/2017|
|Feb 1, 2015 - Jan 31, 2016||$2.17|
|Mar 1, 2015 - Feb 28, 2016||$2.17|
|Apr 1, 2015 - Mar 31, 2016||$2.17|
|May 1, 2015 - Apr 30, 2016||$2.17|
|Jun 1, 2015 - May 31, 2016||$2.17|
|July 1, 2015 - Jun 30, 2016||$2.17|
|Aug 1, 2015 - July 31, 2016||$2.17|
|Sept 1, 2015 - Aug 31, 2016||$2.17|
|Oct 1, 2015- Sept 30, 2016||$2.17|
|Nov 1, 2015 - Oct 31, 2016||$2.26|
|Dec 1, 2015 - Nov 30, 2016||$2.26|
|Jan 1, 2016 - Dec 31, 2016||$2.26|
Which individuals are taken into account for determining the lives covered under a applicable self-insured health plan (HRA)?
Under the HRA, the fee calculation is determined based on the number of participants enrolled in the HRA. This means that dependents and any other beneficiaries can be ignored.
What is O.C.A. doing to assist your organization?
Legally, O.C.A. cannot remit and pay the PCORI fee on behalf of the employer. As a result, as a value added service O.C.A. will determine (every year) the fee amount each employer owes. The fee can be determined using calculation methods offered by the IRS.
Example HRA PCORI Fee Calculation:
ABC company has 20 enrolled HRA Participants (each have family Coverage), which consist of a total life count of 50 lives. The plan ends on 12/31/16. The employer PCORI fee would be (20 Employees X $2.26) $45.20. This is based on the 20 participation life count. Again, under the HRA, the dependents and beneficiaries do not count towards the fee calculation. This fee will be due July 31, 2017.
How will O.C.A. be calculating your fee?
O.C.A. used the “Actual Count Method to determine the fee for each applicable employer. Remember, the fee is only for the participant. It does not factor in any dependents. Actual Count Method: A plan sponsor may determine the average number of lives covered under a plan for a plan year by adding the totals of lives covered for each day of the play year and dividing that total by the total number of days in the plan year. O.C.A. will issue a report by mid June of each year identifying the amount owed. Employers should consult with their tax consultant to review the IRS Form 720.