If your company sponsors a self-insured health plan, you may recall that you’ve been required since 2012 to pay an annual fee to fund the Patient-Centered Outcomes Research Institute (PCORI). Commercial group health insurers also pay fees to support the institute, which researches the clinical effectiveness of medical procedures.
This year’s fees have increased slightly, and the amount you owe will be different depending on where your plan year ending date falls. The annual due date for the fees is July 31.
This year, for plan years ending during 2016, the fees due per covered person are as follows:
$2.26 per person covered – for plan years ending on or after October 1, 2016 through December 31, 2016 (including calendar year plans)
$2.17 per person covered – for plan years ending on or after January 1, 2016 through September 30, 2016
According to an alert on the fee increases, “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 year for assessment is the 2018 calendar year.” This means remaining due dates for self-insurers are July 31 in 2017, 2018, and 2019.
To pay the PCORI fee, use Form 720 for the second calendar quarter and the related instructions. Also note that, according to Department of Labor guidance, the fee cannot be paid by plan assets and cannot be paid in whole, or in part, by participant contributions.
PCORI fees should also not be included when calculating the cost of the plan’s COBRA premium. However, in 2013 the IRS indicated that the fee is a tax-deductible business expense for employers with self-funded insurance plans.
For more advice regarding your company’s health insurance and compliance, contact any of our Axiom HR professionals.