Keep an eye out for info on PCORI fees!

It’s June.  Chances are you are thinking about summer sun and fun, but here at SBA we’re thinking about PCORI fees! And, for employers who have an HRA or contribute to a participants FSA plan, you should be too. If you are an SBA client who is required to submit PCORI fees, in early July, you will be receiving a completed IRS Form 720 with backup of how we arrived at the number of enrolled employees and the fee amount you are required to submit.

The deadline to submit the IRS Form 720 with payment is July 31st.  You can mail the form with a check, or mail the form and use www.eftps.gov to submit the payment electronically.

What is a PCORI Fee? 

The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010.  Provision 6301 of the Act requires employers to remit fees to fund the Patient-Centered Outcomes Research Institute, also known as PCORI, for self-funded medical plans.  Unfortunately, Health Reimbursement Arrangements are considered self-funded medical plans subject to this fee, as are Flexible Spending Healthcare accounts where the employer makes a contribution to employee accounts.

How is the fee calculated?

At SBA, we use the “Actual Count Method” to calculate PCORI fees.  We determine the number of HRA participants enrolled in the plan for each of the 12 months in the previous plan year.  We divide that number of participants by 12 months to find the average number of lives covered for each day of the plan year.  (A short plan year will be calculated in the same method but based on the number of months in the short year).  The PCORI fee for the plan year that ends between 10/01/2015 and 09/30/2016 is $2.17 x the number of average participants.  The fee for the plan year that ends between 10/01/2016 and 09/30/2017 is $2.26 x the number of average participants.

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