The Affordable Care Act imposes an annual fee called the Comparative Effectiveness Research Fee.
Below is a quick synopsis on the PCORI fee, who’s responsible to pay it, how much is the fee, how it is to be paid, and what support OCA will be providing.
Note: OCA is unable to provide PCORI reporting for HRA plans that were administered by a different administrator in 2018 as the fee due by this July 31 pertains to plans ending in 2018 (prior to OCA administering your account). We recommend you contact your prior plan administrator for additional information.
What is the Patient-Centered Outcomes Research Trust Fund fee?
PCORI, or Patient-Centered Outcomes Research Institute, was created by the Patient Protection Affordable Care Act (ObamaCare) to support clinical effectiveness and is funded in part by fees paid by health insurance carriers and health plan sponsors such as employers who provide an HRA. For a detailed FAQ on the PCORI, please visit the IRS website by clicking here.
Who Pays the PCORI Fee?
For HRAs, the Plan Sponsor (the employer) must pay a fee for each covered HRA employee. This fee is due July 31st of the calendar year following the end of the plan year being reported. The fee is remitted using IRS Form 720, the Quarterly Federal Excise Tax Return.
Each applicable employer will have to make a check payable to the “United States Treasury Department” and mail to the below address.
Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999-0009
What is OCA doing to assist your organization?
Legally, OCA cannot remit and pay the PCORI fee on behalf of the employer. As a result, as a value added service OCA will determine (every year) the fee amount each employer owes. The fee can be determined using calculation methods offered by the IRS. OCA will issue a report by mid June to each applicable employer outlining the calculated fee amount. Employers should consult with their tax consultant to review the IRS Form 720.
How will employers receive the OCA PCORI fee report?
The PCORI report will also be mailed via USPS to the employer address listed on file. However, employers will also receive an email notification that the PCORI report is now available to view on the myRSC employer portal.
Remember, since OCA cannot legally pay this fee on behalf of the employer, the report OCA provides is simply identifying the PCORI fee owed by this July 31st. It is the employers responsibility to complete the IRS form 720 and remit payment to the United States Treasury Department.
How much is the fee?
To see a complete listing of the fee schedule, please click here.
Which individuals are taken into account for determining the lives covered under a applicable self-insured health plan (HRA)?
Under the HRA, the fee calculation is determined based on the number of participants enrolled in the HRA. This means that dependents and any other beneficiaries can be ignored.
How will OCA be calculating your fee?
OCA used the “Actual Count Method to determine the fee for each applicable employer. Remember, the fee is only for the participant. It does not factor in any dependents. Actual Count Method: A plan sponsor may determine the average number of lives covered under a plan for a plan year by adding the totals of lives covered for each day of the play year and dividing that total by the total number of days in the plan year.
Example HRA PCORI Fee Calculation:
ABC company has 20 enrolled HRA Participants (each have family Coverage), which consist of a total life count of 50 lives. The HRA plan ended on 12/31/18. The employer PCORI fee would be (20 Employees x $2.45) $49. This is based on the 20 participants life count. Again, under the HRA, the dependents and beneficiaries do not count toward the fee calculation. This fee will be due July 31, 2019.
Still have Questions?
Visit our refreshed website: www.oca125.com