GSA Healthcare Reform Series: Patient-Centered Outcomes Research Institute (PCORI) Fees

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  • June 14, 2013

Patient-Centered Outcomes Research Institute (PCORI) Fees

Government Service Administrators (GSA) continues to partner with our clients in achieving compliance with the Patient Protection and Affordable Care Act (PPACA) requirements. PPACA imposes a new Patient-Centered Outcomes Research Institute (PCORI) fee, formerly Comparative Effectiveness Research fee, on health insurers and plan sponsors of group health. The deadline for filing and payment of the PCORI fee is July 31, 2013.

The annual fee initially becomes payable for the first plan year endingon or after October 1, 2012, and will continue to be imposed through plan years ending on or before September 30, 2018. An employer must report and pay the fee via IRS form 720 by July 31 of each year. The filing will cover the plan year that ended during the preceding calendar year.

The fee is calculated on the basis of the “average number of lives” covered under the plan for the applicable plan year. For the first plan year, the fee is $1 multiplied by the average number of covered lives. Thereafter, the multiplier increases to $2 per the average of covered lives.

In the case of an insured plan, this fee will be reported and paid by the insurer. For self-insured plans, the fee is reported and paid by the plan sponsor.

In preparation for the July 2013 reporting and payment requirements, GSA is providing the overview below for your review in support of your development of an action plan to achieve compliance for your business.

Patient-Centered Outcomes Research Institute Fee
What
  • Annual fee on insured and self-insured health plans
Who pays
  • Insurers pay for insured plans – fee is built into rates
  • Plan Sponsors pay for self-insured plans – insurers and/or TPA are not allowed to pay or calculate the fee
When
  • Applies for plan years ending on or after October 1, 2012
  • First payments are due by July 31, 2013
  • Fee continues through 2019
How much
  • Initial annual fee begins at $1 per covered life, including dependents
  • In subsequent years, the multiplier increases to $2 times the average number of covered lives but this number will be reviewed annually and could change
How paid Tax is self-reported on Excise Tax Form 720

 

If you have questions regarding the PCORI fees, call 1.800.250.2741 or email us at solutions@gsanational.com to contact one of our Healthcare Reform subject matter specialists. Or visit the Healthcare Reform section of our website for more information.

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