The Patient Protection and Affordable Care Act (“PPACA”) requires certain issuers of health insurance policies and employers sponsoring self-funded health plans to pay a fee to fund the Patient-Centered Outcomes Research Institute that was established under PPACA (“PCORI Fee”). For plans and policies with years that ended between October 1, 2012 and December 31, 2012, the first PCORI Fee must be paid by July 31, 2013. For other self-funded plans and health insurance policies, the first PCORI Fee payment is due by July 31, 2014. Insurers and plan sponsors with a July 31, 2013 due date need to move quickly to collect the required data and determine the PCORI Fee.
Issuers and plan sponsors must file IRS Form 720 by July 31 to report and pay the PCORI Fee. Electronic filing is also available. Payment is due on the same date the Form 720 is due. The revised Form 720 and instructions are available, at www.irs.gov/uac/Form-720,-Quarterly-Federal-Excise-Tax-Return.
The PCORI Fee is a deductible business expense under Code Section 162. The PCORI Fee is the applicable dollar amount multiplied by the number of covered lives. The applicable dollar amount varies year-to-year as follows:
Late filing of Form 720 or late payment of the PCORI Fee will result in penalties.
Self-insured health plan sponsors must file Form 720 and pay this fee. If your health plan is insured, you will not have to file Form 720 and pay the PCORI Fee directly. Instead, the fee will be paid and the filing completed by the issuer of your insurance policy.
If you need more details on who pays this fee and how it is calculated, contact your ORBA advisor or 312.670.7444.
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