The Affordable Care Act (“ACA”) has created a number of new employer reporting requirements.
One that took effect last year is the Patient Centered Outcomes Research Institute (PCORI) fee and filing.
The filing is required by July 31st of each year, so if this is not on your radar, now is the time. This fee was established to fund the Patient Centered Outcomes Research Institute established by the ACA. It is assessed on group health insurance plans and Health Reimbursement Arrangements (“HRA”).
The fee for the health plan is based on the average number of lives covered by the plan in the prior plan year, which would include covered dependents. For the HRA the fee is based on the average number of employees covered.
The fee is either $1 or $2 annually per person dependent on the end date of your plan year. For plan years ending prior to 10/1/13 the fee is $1, and for plans ending 10/1/13-9/30/14 the fee is $2. In future years this fee may be increased for inflation.
The real question is, what do employers need to do?
If you are covered by a fully insured health plan, nothing. The insurer is collecting this fee in your premiums and responsible for the annual filing. If you have a self-funded health plan, the responsibility falls on the employer. In this case you should be working with your third party administrator to identify the average number of covered lives so you can file and pay the applicable fee.
If you have an HRA coupled with your fully insured medical plan, the employer is also required to file and pay the fee. This is where many employers may be required to act and potentially unaware of their obligations. Your HRA third party administrator (if applicable) should be able to provide the average number of covered employees if they have not proactively done so already.
Your responsibility as the employer is to file form 720 and submit with a payment for the applicable PCORI fee. Form 720 is a multi-purpose form, and there is only one small section that needs to be completed for the PCORI filing.
The PCORI fee is not very expensive but is a new requirement that needs to be built into your annual workflow. If you are not prepared for your filing this year, feel free to contact NWBG for assistance.
NWBG provides guidance with compliance requirements as part of our compliance service package for our clients.