News and Blog

Tuesday, 12 July 2016
PCORI Fee Payment Due by July 31st
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The Affordable Care Act[1] amends the Social Security Act by creating the Patient-Centered Outcomes Research Institute (PCORI). The Institute will be responsible for setting national research priorities and establishing an agenda to carry out such research.

The provision also amends the Internal Revenue Code by creating the Patient-Centered Outcomes Research Trust Fund (PCORTF) that will be used to support the PCORI. In addition to specified appropriations and transfers from the Medicare Trust Fund, the Affordable Care Act also imposes a fee on fully-insured health insurance policies (individual and group) and self-funded health plans that together will fund the PCORTF. This fee is commonly referred to as the PCORI fee.

This article is provided for general use. Employers and other plan sponsors with specific questions about the PCORI fee should contact their legal counsel or tax professional.

Resources

In addition to a plan sponsor's legal counsel or tax professional, the Internal Revenue Service (IRS) provides several resources through its PCORI web page. Information includes:

Final Rule provides the details for calculating the fee, among other pertinent information

IRS Notice 2015-60 provides updated PCORI fee amounts

Questions and Answers addresses common questions about the fee and its payment

Summary Chart a chart of common types of insurance coverage or arrangements, and the party responsible for paying the fee

Form 720 the form to be used to report and pay the fee.

 

Payment is Due by July 31

For members enrolled in fully-insured group plans and individual policies, BlueCross is responsible and liable for calculating, reporting, and paying the fee to the IRS.

For self-funded plans including Health Reimbursement Arrangements (HRAs) the plan sponsor is responsible and liable for calculating, reporting, and paying the fee to the IRS. The final rule provides guidance to determine the plan sponsor and methods for calculating the number of members on which the fee is based.

Fees for plan years ending in 2015 are due by July 31, 2016. The amount of the fee is based on plan year timing as follows:

For plan years ending Jan. 1, 2015 through Sep. 30, 2015, the fee is $2.08 per member per year

For plan years ending Oct. 1, 2015 through Dec. 31, 2015, the fee is $2.17 per member per year

 

Please refer to the IRS website for other information about reporting and paying the fee, especially if you have to file Form 720 for other purposes.

The PCORI fee and HRAs

Several questions have been asked about the application of the PCORI fee to HRAs, particularly for groups with a fully-insured medical plan. As mentioned above, BlueCross is responsible for paying the fee for members enrolled in its insured business. However, HRAs and the plan sponsor of an HRA plan will also be responsible for paying a separate fee on this portion of the plan, unless the plan meets the requirements to be treated as an excepted benefit.  BlueCross does not pay the PCORI fee for self-funded plans, including HRAs that are integrated with fully-insured medical plans.

 

The following excerpt from the IRS summary chart may provide clarity:

"Special rule for coverage under multiple applicable self-insured health plans:

Generally, separate fees apply for lives covered by each specified health insurance policy or applicable self-insured health plan.

However, two or more applicable self-insured health plans may be combined and treated as a single applicable self-insured health plan for purposes of calculating the PCORI fee but only if the plans have:

The same plan sponsor; and The same plan year.

"For example, if amounts in an HRA may be used to pay deductibles and copays under a specified health insurance policy, the HRA (an applicable self-insured health plan) and the policy would be subject to separate PCORI fees. However, an HRA that may be used to pay deductibles and copays under the applicable self-insured health plan is not subject to a separate fee (and the fee will apply only to the applicable self-insured health plan) if both the HRA and the applicable self-insured health plan have the same plan sponsor and the same plan year.

There is no similar rule for lives covered by more than one insurance policy subject to the PCORI fee.

 

"Special counting rule for HRAs and FSAs:

Plan sponsors are permitted to assume one covered life for each employee with an HRA.

Plan sponsors are permitted to assume one covered life for each employee with an FSA."

 

Available Reporting for Self-funded Plans

While BlueCross cannot report or pay the PCORI fee on behalf of self-funded plans, we are providing a variety of resources that may assist plan sponsors. BlueCross provides information to self-funded plans for Form 5500 reporting, including the number of participants at the beginning and end of the year for plans that we administer.

In addition, BlueCross has reports available through the Self-Service Reporting tool under our BlueAccess secure portal. These reports may be of assistance if the plan sponsor determines it to be appropriate. Two reports are available:

Demographic Breakdown of Members Report This report provides the number of members by month. For each complete month, the membership information returned is as of the last day of the month.

To access the report:

Log-on to BlueAccess

Select Interactive Reports

Select Launch Enter Client (group) name if prompted (group administrators will have access only to their specific group information)

Select the "Demographic Breakdown" option listed under the Member Information section

The current reporting date is the default. If you are looking for the most recent information, select "View Reports". This will return all member demographics for the group. Run the report for the month you need. Print or download/export the results for your records.

Enrollment Report This report provides the number of subscribers by month. For each complete month, the enrollment information returned is as of the last day of the month and presented as a breakdown by contract type.

To access the report:

Follow the first three steps for accessing the Demographic Breakdown of Members report as outlined above

Select the "Enrollment by Group by Month" option listed under the Member Information section

 

The current reporting date is the default. Run the report for the period that you wish to see. The results will be separated for each month within the time period specified. You can print or download/export the results for your records.

 

These reports provide information about all subscribers or members enrolled under a group number based on the information in our database at the time the report is compiled. Data for any given month is usually available for reporting ten days after the month end.  The reports will not reflect any additions or terminations that have not yet been reported and/or processed by BlueCross.

 

The reports can be customized to be run on the entire group population or parts of it as identified by subgroup, plan ID or Department. They can be run on any study period between 1 and 48 months.

 

This information is provided for general use. If you are an employer or self-funded plan sponsor and have specific questions regarding the calculation, reporting, or payment of the PCORI Fee, please consult with your attorney or tax professional.

 

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on March 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on March 30, 2010. They are collectively known as the Affordable Care Act.

 

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on March 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on March 30, 2010. They are collectively known as the Affordable Care Act.

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Posted on 07/12/2016 2:15 PM by BCBST reposted by David Moore
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