An annual fee to help pay for the Patient-Centered Outcomes Research Institute (“PCORI”) is imposed by the Affordable Care Act (the “ACA”) on issuers of specified health insurance policies and sponsors of self-insured health plans. In the case of a self-insured multiemployer plan, the sponsor is normally the Board of Trustees which administers the plan and manages its assets.
The payment of the fee must be accompanied by a tax return, Form 720, Quarterly Excise Tax Return (Second Quarter). This form and its instructions are here and here. The payment may, but need not, be made electronically, through the Electronic Federal Tax Payment System. Similarly, the Form 720 may, but need not, be filed electronically.
This year, the fee and return are due by August 1, 2016. The fee generally applies to major medical coverage. It does not apply to dental and vision coverage which are excepted benefits. For more information on whether a type of insurance coverage or arrangement is subject to the fee, see this Chart.
The amount of the PCORI fee is equal to the average number of lives covered during plan year, including employees, spouses and dependents, multiplied by the applicable dollar amount for the year. The average number of lives for a self-insured plan, including self-insured multiemployer plans, can be determined by one of three methods: the actual count, snapshot or Form 5500 method. These methods are discussed by the IRS on the PCORI Fee Homepage and PCORI Fee FAQs.
Having determined this average number, the applicable dollar amount is then:
–if the plan year ends after December 31, 2014 and before October 1, 2015, $2.08 per covered life; or
–if the plan year ends after September 30, 2015 and by December 31, 2015, $2.17 per covered life.