Patient-Centered Outcomes Research Fee

Patient-Centered Outcomes Research Fee

Among the many provisions of the Affordable Care Act, is the Patient-Centered Outcomes Research Trust Fund fee (PCORI fee) that is imposed on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plan.  As an employer, you may be subject to this fee if you have a self-insured health plan as you would be considered the plan sponsor. If you have a fully-insured health plan, the health insurance company will be subject to the fee.  It is important to note that even though you many have a fully-insured health plan, you may still be subject to the PCORI fee if you offer other health insurance benefits that are self-funded (i.e. a health reimbursement arrangement).  Please go to the following link to see an IRS table that outlines what types of insurance policies are subject to the fee and who is responsible for paying the fee:

http://www.irs.gov/uac/Application-of-the-Patient-Centered-Outcomes-Research-Trust-Fund-Fee-to-Common-Types-of-Health-Coverage-or-Arrangements

The fee begins with plan years ending before October 1, 2013 and will continue for seven years thereafter.

The fee amount is $1 times the average number of covered lives under the plan for policy years ending before October 1, 2013 and will increase to $2 for plan years ending before October 1, 2014.  For plan years ending after October 1, 2014, the dollar amount will be adjusted to reflect inflation.  The fee is reported on Form 720, Quarterly Federal Excise Tax Return and is required to be reported annually on the second quarter Form 720 which has a due date of July 31.  The first fee payment is due July 31, 2013.  Please go to the following link to find a copy of Form 720:

http://www.irs.gov/pub/irs-pdf/f720.pdf

If you have any questions or need further assistance, please do not hesitate to contact our office.