The PCORI Fee for the 2016 plan year is due on July 31, 2017. The fee is filed on IRS Form 720; Quarterly Federal Excise Tax Return. The fee may be filed electronically or mailed to the IRS. For fully insured plans, the health insurance issuer will pay the fee. Employers with self-funded plans are generally responsible for paying the fee themselves, although some TPAs will collect and file the fee on employers’ behalf. Fully insured employers who also have an HRA are responsible for paying the fee levied on the HRA.
The PCORI Fee is due by the July 31 following the end of the plan year:
|Plan Year End Date||Fee Per Covered Life||Due Date|
|January 1, 2016 – September 30, 2016||$2.17||July 31, 2017|
|October 1, 2016 – December 31, 2016||$2.26||July 31, 2017|
Health Saving Accounts (HSAs) and most Flexible Spending Accounts (FSAs) are not subject to the PCORI Fee, but Health Reimbursement Accounts (HRAs) are. Generally, a separate fee would apply for lives covered by each health insurance policy or self-funded plan. However, if an employer has multiple self-insured health plans with the same plan sponsor and the same plan year, such as a medical plan and an HRA, employers may treat those plans as a single applicable self-insured plan.
To determine the average number of lives (including employees, dependents, and COBRA enrollees) covered by a plan, employers can use one of three methods:
- Actual Count – Add the total number of lives covered by the plan on each day of the plan year and divide by the total number of days in the plan year
- Snapshot – Add the total number of lives covered by the plan on one date in each quarter, and divide the total by the number of dates used
- A “snapshot factor” method may also be used. The same quarterly methodology is used, but instead of the total number of members, the number of employees who elected any coverage other than self-only is multiplied by 2.35, and added to the number of employees who elected self-only coverage
- Form 5500 – take the sum of the number of lives covered under both self only coverage and family coverage (including EE+SP, EE+C, etc.) at the beginning of the plan year and at the end of the plan year
- Because the PCORI Fee is paid on the preceding plan year, employers may only use 5500 data if the 5500 is filed on or before July 31, 2017. If the employer took the 2 ½ month extension, they are ineligible to use 5500 counts
Special counting rules may be used for HRAs and FSAs. Employers may assume one covered life for each employee with an HRA or a FSA.Next Post