The fee is paid using Tax Form 720 and is due annually on July 31 of the calendar year immediately following the last day of the plan year. For example, for a plan year ending on or before December 31, 2018, the form must be filed (and the fee paid) by July 31, 2019.
Who Pays the Fees:
Health insurance policies and self-insured plans that provide only excepted benefits, such as plans that offer benefits limited to vision or dental benefits and most flexible spending arrangements (FSAs), are not subject to the PCORI fee. Health insurance policies or self-insured plans that are limited to employee assistance programs, disease management programs or wellness programs are not subject to the PCORI fee if these programs do not provide significant benefits in the nature of medical care or treatment. For more information
click here
.
Major Medical
The PCORI fees for fully insured major medical coverage will be paid by the insurance carrier. The PCORI fees for self-funded major medical coverage will be paid by the employer.
HRA or FSA with a Fully Insured Medical Plan
If the Employer has other medical healthcare plans and that coverage is fully insured, covered lives that were already counted with the medical healthcare plan will need to be counted and paid again for the HRA or non-exempt FSA plan.
The insured carrier will pay the fees for the medical healthcare plan and the Employer will pay the fees for the HRA or non-exempt FSA plan. When calculating the HRA or FSA PCORI fee (if applicable) the employer can treat each participant in the HRA or FSA as covering a single life for purposes of the PCORI fee. No fee is required for the participant's spouse or dependent children.
HRA or FSA with a Self-Funded Medical Plan
If the Employer has other medical healthcare plans that are self-funded and on the same plan year as the HRA or nonexempt FSA, then any covered life that was already counted for the medical healthcare plan will not need to be counted and paid again for the HRA or non-exempt FSA plan. If the Employer has other medical healthcare plans that are self-funded and NOT on the same plan year as the HRA or FSA, then any covered life that was already counted for the medical healthcare plan will need to be counted and paid again for the HRA or non-exempt FSA plan.
Stand-alone HRA
If the Employer has no other medical healthcare plan with the HRA, then the fee will be paid by the Employer on the number of covered lives under the HRA. The Employer can treat each participant in the HRA as covering a single life for purposes of the PCORI fee. No fee is required for the participant's spouse or dependent children.
FSA Plan
Flexible Spending Accounts (FSAs) that meet the definition of an excepted benefit are exempt from PCORI fees; however, if the FSA does not meet the definition of an excepted benefit, the fee is payable by the Employer. The Employer can treat each participant in the FSA as covering a single life for purposes of the PCORI fee. No fee is required for the participant's spouse or dependent children.
Your FSA plan may be subject to PCORI fees if you have an Employer contribution exceeding $500 or you do not offer other group health coverage in conjunction with the FSA. Please contact Benefit Strategies, LLC if you would like information specific to your account.
Remitting the PCORI Fee:
You will not be invoiced for the PCORI Fee. You are required to file federal excise tax return Form 720; please
Click Here
for instructions for Form 720 on how to fill out the form and calculate the fee. Payment must be submitted with the form by July 31 of the calendar year immediately following the last day of the plan year.
Third-party administrators are prohibited under the health reform law from remitting the fee on your behalf.
How to Calculate:
The IRS allows several different methods for determining the average number of covered lives. We recommend the Snapshot Count Method and have two ways to assist you with determining the number.
Contact Your Account Manager To Request Our PCORI Report:
This report provides the average number of covered lives, using the Snapshot Count Method.
Access Your Account Balance Reports (ABR) by logging into your secure administrator portal at
benstrat.com
.
ABRs are available the first of each month, simply select the ones you need to perform the Snapshot Count Method calculation. At the bottom of each report you will find the total number of participants. Follow these steps for performing the calculation using the Snapshot Count Method: Count the total number of covered lives on a specific date each quarter. Add the numbers for each quarter together and then divide that number by 4. Note that the date selected must be the same for each quarter (i.e., 1/1, 4/1, 7/1 & 10/1) or within 3 days of the first date used each following quarter.