As discussed in prior editions of Trion’s HCRAlert!, the Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute to conduct comparative clinical effectiveness research, which is funded by a fee (“PCORI fee”) levied on health insurers and self-funded group health plan sponsors. The Internal Revenue Service (IRS) recently released IRS Notice 2016-64, which announced that the PCORI fee for plan years ending between October 1, 2016 and September 30, 2017 will be $2.26 per covered life per year.
PCORI fees apply to each plan year ending between October 1, 2012 and September 30, 2019. The ACA statute set the fee at $1 per covered life for the first year of applicability and $2 per covered life for the second year of applicability. Thereafter, fees are to be indexed annually for inflation, as demonstrated in Notice 2016-64.
Fees are due by July 31st of the calendar year following the end of the plan year to which the fee applies. This means fees are due no later than July 31, 2017 for plan years ending in 2016. The chart below outlines the annual payment due dates and fee amounts based upon the date on which a plan year ends:
| Plans with Annual Plan Years Ending Between Oct. 1 and Dec. 31 | Plans With Annual Plan Years Ending Between Jan. 1 and Sep. 30 | ||||||
|---|---|---|---|---|---|---|---|
| If Plan Year Ends Between | Due Date Is | Per Capita Fee Is | If Plan Year Ends Between | Due Date Is | Per Capital Fee Is | ||
| 10/1/12 to 12/31/12 | 7/31/13 | $1.00 | 1/1/13 to 9/30/13 | 7/31/14 | $1.00 | ||
| 10/1/13 to 12/31/13 | 7/31/14 | $2.00 | 1/1/14 to 9/30/14 | 7/31/15 | $2.00 | ||
| 10/1/14 to 12/31/14 | 7/31/15 | $2.08 | 1/1/15 to 9/30/15 | 7/31/16 | $2.08 | ||
| 10/1/15 to 12/31/15 | 7/31/16 | $2.17 | 1/1/16 to 9/30/16 | 7/31/17 | $2.17 | ||
| 10/1/16 to 12/31/16 | 7/31/17 | $2.26 | 1/1/17 to 9/30/17 | 7/31/18 | $2.26 | ||
| 10/1/17 to 12/31/17 | 7/31/18 | TBD | 1/1/18 to 9/30/18 | 7/31/19 | TBD | ||
| 10/1/18 to 12/31/18 | 7/31/19 | TBD | 1/1/19 to 9/30/19 | 7/31/20 | TBD | ||
Insurers are responsible for filing and paying fees for insured plans, while plan sponsors are responsible for filing and paying fees for self-insured plans. Fees must be filed using IRS Form 720 (“Quarterly Federal Excise Tax Return”), which is an existing IRS form used for a variety of excise taxes. Although it is a “quarterly” form, if a filing entity has no other excise taxes to report via Form 720, the filing entity need only file the form once per year.
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Your Trion Strategic Account Managers are here to answer any questions you might have as you prepare to comply with upcoming ACA requirements. If you are not currently a Trion client and would like assistance navigating the changes required by health care reform, please contact us today by e-mail: MBGray@Trion.com