As a self-insured employer, if you (or your client) have not paid your Patient-Centered Outcomes Research Institute (PCORI) fees for 2015, they are due at the end of this month, July 31.
What is PCORI?
The Patient-Centered Outcomes Research Trust Fund fee is an annual fee charged to plan sponsors of self-insured health plans. It was established by the Patient Protection and Affordable Care Act (PPACA) and enforced thru the IRS “to assist, through research, patients, clinicians, purchasers and policy makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. “ Research findings on comparative clinical effectiveness is compiled and delivered to a variety of entities including nonprofit and for-profit research organizations, universities, hospitals, laboratories and units of state, local or federal government.
The PCORI fee applies to all applicable self-insured health plans that have policy years ending after Sept. 30, 2012 and before Oct. 1, 2019. The cost is based on the average number of lives covered under the policy for the policy year or the plan for the plan year. To determine a company’s average number of lives, the IRS listed their final regulations in 2012, that employers can use one of three alternative methods:
1. actual count method
2. snapshot method
3. IRS Form 5500 method
For more details on the three above methods used for calculating your fee, click "here".
All individuals are counted in totaling the number of lives, including dependents. The only exception would be if the plan is a health reimbursement arrangement (HRA) or flexible spending arrangement (FSA). Those retirees and former employees covered under COBRA would also need to be included in the total number of covered lives.
The fee structure below is based on your or your client’s plan year end date. Fee increases are due to increases in the projected per capita amount of national health expenditures.
- Policies and plan years ending after Sept. 30, 2013 and before Oct. 1, 2014, the amount is $2.00.
- Polices and plan years ending after Sept 30, 2014 and before Oct. 1, 2015, the amount is $2.08
You are required to fill out IRS Form 720 and include it along with your fee payment. this is due by July 31 of the year following the last day of your or your client’s plan year. All PCMI clients should have received a life count report to help them complete this form and calculate payment but should a duplicate copy be needed, please contact Jaquelyn Parungao at jparungao @ pinnacletpa.com or call her at (949) 885-2227.