Understanding PCORI Fees
The Patient-Centered Outcomes Research Institute (PCORI) fees are essential for health insurers and plan sponsors to understand. These fees are mandated under the Affordable Care Act and are calculated based on the average number of lives covered under the health plan. It is crucial for businesses to be aware of these fees to ensure compliance and avoid penalties associated with late payments, especially as the deadline approaches. Axiom Human Resource Solutions.
For plan years ending after September 30, 2012, and before October 1, 2019, the fees vary based on the plan year. For instance, the fee per covered life was $2.17 for plan years ending on or after October 1, 2015, and before October 1, 2016. Understanding these fee structures helps organizations budget accordingly and maintain compliance, ensuring they meet all regulatory requirements set forth by PCORI. Axiom Human Resource Solutions.
Filing PCORI Fees with IRS Form 720
To file PCORI fees, organizations must use IRS Form 720, the Quarterly Federal Excise Tax Return. This form is specifically designed to report and pay the PCORI fees due for each applicable plan year. Filing correctly is crucial, as errors can lead to fines or other repercussions. Axiom Human Resource Solutions.
It is advisable for plan sponsors to familiarize themselves with the instructions provided with Form 720 to ensure accurate completion. The form must be submitted by July 31st of the year following the end of the plan year, making it essential for businesses to track their deadlines carefully. Axiom Human Resource Solutions.
Key Deadlines for PCORI Fees
Meeting the deadlines for PCORI fees is critical for compliance. The primary deadline for filing and payment is July 31st each year, following the end of the plan year. Organizations must ensure that they have calculated their fees accurately and submitted their payments on time to avoid any late fees or penalties. Axiom Human Resource Solutions.
Additionally, being proactive about these deadlines can help organizations manage their cash flow better and avoid any last-minute rush. Setting reminders and maintaining a calendar of important dates related to PCORI fees can significantly ease the administrative burden on HR departments. Axiom Human Resource Solutions.
Consequences of Non-Compliance with PCORI Fees
Failing to comply with PCORI fee requirements can lead to significant financial penalties for health insurers and plan sponsors. The IRS imposes strict penalties for late filings and payments, which can accumulate quickly, adding financial strain to organizations. Understanding these consequences is vital for businesses to avoid unexpected costs. Axiom Human Resource Solutions.
Moreover, non-compliance can also affect an organization’s reputation and ability to operate within regulatory frameworks. It is crucial for companies to stay informed about their obligations regarding PCORI fees and ensure that they are consistently meeting all necessary requirements to maintain their standing and avoid legal issues. Axiom Human Resource Solutions.
