This applies to all employers with self-funded health plans who file Form 720.
Overview
Under the Affordable Care Act (ACA), all medical plans are responsible for paying the Patient-Centered Outcomes Research (PCORI) fee to the IRS from October 2012 through September 30, 2019. The fee is calculated based on the number of plan participants. For insured medical plans, your insurance carrier will pay the fee on your behalf.
If your company has a self-insured medical plan, you must file Form 720 and pay the fees directly to the IRS by July 31 of the calendar year immediately following the calendar year in which the plan year ends. This requirement for self-insured medical plans does generally apply to Health Reimbursement Arrangements (HRAs) and some employer-funded Health Flexible Spending Accounts (FSAs).
If you provide a medical HRA alongside a fully insured medical plan, you must calculate and pay the PCORI fee for the HRA. If you provide a medical HRA that is integrated with another self-insured medical plan sponsored by the same employer, the HRA is not subject to a separate fee.
The PCORI fee assessment only applies to Health FSAs if the employer contribution is greater than $500 and more than the employee’s contribution.
How Much did the PCORI Fee Increase?
The IRS's Notice 2017-61 stated that the applicable dollar amount used to calculate the PCORI fee payable for plan years that end on or after October 1, 2017, and before October 1, 2018, including 2017 calendar year plans, increased from $2.26 to $2.39.
Employer Action Item
Please note the PCORI fee increase when filing Form 720. For plan year 2017, the form is due on July 31, 2018. More information on the fee, including how to calculate number of plan participants, can be found via the IRS website here.
