The Internal Revenue Service announced that the Patient-Centered Outcomes Research Institute (PCORI) fee will rise to $2.45 (from $2.39) per covered life in plan years that fall between October 1, 2018, and September 30, 2019. This increase will have an impact on 2019 plan year rates and is attributable to a rise in health care expenditures nationally.
Note that the PCORI fee expires as of October 1, 2019. The PCORI fee is effective for policy and plan years ending after Sept. 30, 2012, and before Oct. 1, 2019.
The Affordable Care Act (ACA) requires that all health insurers and all companies that offer self-funded group health coverage pay the PCORI fee annually. The purpose of the fee is to fund a government-sponsored center to research the effectiveness of various medical care treatments. Health insurance carriers are responsible for paying the tax on behalf of all fully-insured health plan participants and the new increase will be built into your 2019 rates, if your company is fully insured. However, if your company is operating a self-insured medical plan, your company has to pay the PCORI fee directly to the IRS with the required paperwork.
The amount of the tax is determined by the total number of people (including spouses, dependents, etc.) covered by each group plan, not just the number of covered employees. There are several methods an affected employer plan can use to make that count, including the actual count method, the snapshot method, the member months method or the state form method. Employer plan sponsors must document their calculation and pay their fee using IRS Form 720 by July 31 of each reporting year.
Here is a link to the IRS website, with a Q & A on the PCORI fee:
If you have any questions about whether or not your company needs to calculate and pay its PCORI fee separately, or how you should do so, please contact your Innovative Benefit Planning’s Employee Benefits Consultant.
