The IRS and the Department of Health and Human Services have issued final regulations that provide details on two new, temporary fees that will be due as part of the Patient Protection and Affordable Care Act (PPACA). These fees will be calculated and paid directly by self-funded plans. The fees will be calculated and paid by insurers, although insured plans should expect these fees to be passed along.
Both the Patient-Centered Outcomes Research Institute (PCORI) fee and the Transitional Reinsurance Fee (TRF) are based on covered lives — that is, both employees/retirees and their covered spouses and children must be counted. The basic methods a plan may use to count members are the same under the two fees (although a plan may use one method for one fee and a different method for the other fee if it prefers). However, because the PCORI fee is based on a plan year, the PCORI count looks at the entire plan year. (Note that although PCORI is based on the plan year, the reporting and fee due date is always July 31.) In contrast, the TRF is based on a calendar year, even for non-calendar-year plans. TRF reporting of covered lives will be due Nov. 15 and the fee will be due early in the next January. To meet the Nov. 15 reporting date, for TRF purposes covered lives will only be counted for the first nine months of the calendar year.
The PCORI fee is small — $1 or $2 dollars per covered person per year — and will be in effect from 2012 through 2019. It is designed to fund research into the most effective ways of treating various diseases. The federal TRF will be $63 per covered person for the 2014 calendar year. It will be about two-thirds of that amount in 2015 and about half that amount in 2016, and then will expire. (States have the right to charge their own, additional TRF; states that wish to do so must provide details on the state fee by April 11, 2013. Few states are expected to add a state-level fee.) The TRF is designed to pay a portion of the cost for individuals with large claims.
To see a comparison of these two fees, please click the link: PCORI versus TRF Fees
