IRS Notice 2015-60 Patient-Centered Outcomes Research Fee (PCORI)
Code Sections 4375 & 4376 – Insured and Self-Insured Health Plans through October 1, 2019
The PCORI fees are due by July 31st. The chart below shows the fees to be paid in 2019, which rose slightly from the fees owed in 2018.
Fee per Plan Enrollee for July 31, 2019, Payment
|Plan year ending on or after Oct. 1, 2018, and before October 1, 2019||
Fully Insured Plans
The fee is required to be paid by the insurance issuer underwriting the group policy. The “Counting Method” will be determined by the insurance carrier.
The fee is required to be paid by the Plan Sponsor. The Plan Sponsor must determine the Plans “Counting Method” by selecting one of the below options.
Actual Count Method:Calculate the sum of the lives covered for each day of the plan year and then divide that sum by the number of days in the year.
Snapshot Method: Calculate the sum of the lives covered on one date in each quarter then divide by the number of days on which the count was made. The number of lives covered on any one day may be determined by counting the actual number of lives on that day or by treating those with single coverage as one life and those with double/family coverage as 2.35 lives.
Form 5500 Method: Add the number of employees covered at the beginning of the plan year to the number of employees covered at the end of the plan year.
Health Reimbursement Arrangements (HRA’s)
The fee is required to be paid by the plan sponsor if the HRA is not HIPPA excepted *an HRA is generally non- HIPPA excepted if its value exceeds $500*. The Plan Sponsor receives special counting rules for non- HIPPA excepted HRA’s by treating each participant HRA as covering a single covered life and therefore not required to count any spouse, dependent or other beneficiary of the participant. The count can be made on the last day of the plan year.
NOTE: if the Plan Sponsor maintains another self-funded health plan, participants in the HRA who also participate in the other self-funded health plan only need to be counted once for fee purposes.
Employer Funded Flexible Spending Accounts (FSA’s)
The fee is required to be paid by the plan sponsor if the FSA is not HIPPA excepted under HIPPA Portability rules, an FSA is generally not HIPPA excepted if it does not pass:
Availability Condition: Participants with Health FSA coverage must also have other group health plan coverage available during the plan year from the employer with the same eligibility.
Maximum Benefit Condition: A participant’s health FSA annual election cannot exceed two times the employee’s salary reduction for the year, or if greater, the amount of the employee’s salary reduction election for the health FSA, plus $500.
For those HRA plans that are administered by Flexible Benefits System and are required to pay the PCORI fee, Relph Benefit Advisors will calculate the applicable PCORI fee. You will receive your PCORI calculation and the 2019 IRS Form 720 once the amended 720 is released, usually around April 1st. The fee needs to be submitted with payment no later than July 31, 2019.