June 5, 2019
It’s that time of year again; the annual Patient-Centered Outcomes Research Institute (PCORI) funding fee is due July 31st, 2019 for the 2018 plan year. For self-insured health benefit programs, the employer/plan sponsor is responsible for submitting the fee and accompanying paperwork to the IRS by the July 31st deadline. For fully insured programs, the insurance carrier will submit the payment on behalf of the employer.
For the coming year, self-insured health plan sponsors should use Form 720 for the second calendar quarter to report and pay the PCORI fee by July 31, 2019.
Although the fee is paid annually, employers should indicate on the Payment Voucher (720-V) — located at the end of Form 720 — that the tax period for the fee is the 2nd Quarter. Failure to properly designate “2nd Quarter” on the voucher can result in the IRS’s software generating a tardy filing notice.
Fully-insured plan sponsors will not need to file.
There are rules for Special Arrangements, specifically, HSA or HRA accounts. An HRA is not subject to a separate PCORI fee if the plan sponsor also maintains a separate applicable self-insured health plan within the same plan year. In such circumstance, the plan sponsor is permitted to treat the HRA and the other plan as a single applicable self-insured health plan and pay the PCORI fee once with respect to each life covered under the HRA and other plan.
However, the regulation does not permit a plan sponsor to treat the HRA and fully insured plan as a single plan, for purposes of the fee. An HSA is generally not considered a plan sponsored by an employer, so it should not be considered an applicable, self-insured health plan that is subject to the fee. However, high-deductible health plans are subject to the fee.
Note: the regulations provide a special rule which permits a plan sponsor to assume one covered life for each employee with an HRA and for each employee with an FSA that is not an excepted benefit.
Fees for 2019 are listed below:
For plans ending between January 1 and September 30, 2018, the applicable rate is $2.39 per covered life. For plans ending between October 1 thru December 31, 2018, the applicable rate is $2.45 per covered life. Plans ending January 1, 2020 and beyond will file their PCORI fees in July 2020.
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About the Authors. The information reflected in this post was prepared by The Fedeli Group using information provided by third party resources. The Fedeli Group is not responsible for the accuracy of the information contained herein.
The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client-lawyer relationship is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. The Fedeli Group is not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions.
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