***When the President signed the 2020 spending legislation (the 2020 Further Consolidate Appropriations Act), that repealed the ACA’s Cadillac Tax, the 2.3% excise tax on medial devices, the HIT (Health Insurance Tax). But, it also extended PCORI/CERF for another decade—now expected to sunset 2029. However, as of June 1, 2020, the IRS has yet to set the rate for 1/1 plans ending 12/31/2019. It is expected to be at or above the $2.45 per person charge. ***June 5, 2020 update, IRS Released new rate at $2.54 per person (update here).*** See blog update here about the extension until 2029.
*Note-this is the final year for 2018 calendar year plans. Plans that end between Jan 1, 2019 and October 1, 2019 will owe again, next year. Please see our multi-year reference chart here.
Applies to: Self-Insured Health Plans, including HRAs & FSAs
Employers who sponsor self-insured health plans must pay their annual Patient-Centered Outcomes Research Institute (PCORI) fees by July 31.
PCORI fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). The applicable PCORI fee you pay each July is based on when your plan year ended.
As a reminder, the PCORI fees are based on the average number of covered lives under the plan or policy. This ordinarily includes employees and their enrolled spouses and dependents. Individuals who are receiving continuation coverage (such as COBRA coverage) must also be included in the number of covered lives under the plan in calculating the fee. Plan sponsors of self-insured health plans must use one of the following three methods to determine the average number of lives covered under a plan for the plan year:
HRAs and Health FSAs
Health Reimbursement Arrangements (HRAs) and health Flexible Spending Accounts (FSAs) are not completely excluded from the obligation to pay PCORI fees. However, two special rules apply for plan sponsors that provide an HRA or health FSA. Under these special rules:
The same analysis applies to health FSAs that do not qualify as excepted benefits.
Please contact your AssuredPartners’ Sales Executive or Account Manager for any further questions or assistance.
Please see the following IRS resources for more information on the ACA’s PCORI Fees:
IRS Notice 2018-85 (released 11/5/2018)
Final Regulations on the PCORI Fees
PCORI Fee Overview Page
PCORI Fee: Questions and Answers
IRS Form 720 and Instructions
PCORI Fee Due Dates and Applicable Rates
Chart of Health Coverage and Arrangements Subject to PCORI Fee
AssuredPartners Multi-Year PCORI Fee Reference Chart
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