Employers who are responsible for paying the annual Patient-Centered Outcomes Research Institute (PCORI) Trust Fund fee should use the updated Form 720. The PCORI fee must be reported annually on the second quarter Form 720 and paid by the July 31 due date.
The fee is calculated based on the average number of lives covered under the plan. Employers who file the second quarter Form 720 only to report the PCORI fee are not required to file in other quarters. For fully insured health insurance plans, the fee is paid by the carrier and collected through premiums.
Sponsors of multiple self-insured plans (Example: a health plan, HRA and FSA) with the same plan year can treat those plans as a single plan for purposes of calculating the fee. A special rule also exists that allows a plan sponsor to assume one covered life for each employee with an HRA and for each employee with a non-excepted FSA (spouses or dependents are not counted). A non-excepted FSA occurs if one or both of the following are true:
1. The employer’s contribution to the FSA is greater than 2.5 times the employee’s contribution or more than $500.
2. The employer does not offer group health insurance.
The fee (see schedule) is based on a group’s plan year. This is the final year to pay the fee for groups with a calendar-year plan. If applicable, check the box on Form 720 indicating this is the final return. Generally, plan sponsors of applicable self-insured health plans must use one of four alternative methods to determine the average number of lives covered during the plan year.
Employers may want to refer to the IRS instructions (see page 9) before completing the form.
For questions, contact your Bukaty Benefits consultant at 913.345.0440.
